IRS PLR: Carbon Offset Credit, Reforestation Grant Payments Qualifying Income (IRC §856)

The IRS has issued a private letter ruling on Section 856(c)(5)(J) concluding that: 1) income from the issuance of carbon offset credits will be considered qualifying income under Sections 856(c)(2) and (3); 2) income from reforestation grant payments will be considered qualifying income under Sections 856(c)(2) and (3); 3) income from a damages settlement payment will be considered qualifying income under Sections 856(c)(2) and (3); and 4) income from an additional settlement payment for legal fees will be excluded from gross income under Sections 856(c)(2) and (3). [PLR 202536024]

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