Cubs’ Ex-Owner Subject to Tax on $425 Million, IRS Says (2)

Tribune Media Co. should be subject to tax on $425 million in “senior debt” issued by outside parties to finance its 2009 disguised sale of the Chicago Cubs baseball franchise to Chicago Baseball Holdings, the federal government told the Seventh Circuit.

During the sale year, Tribune formed Chicago Baseball Holdings with the Cubs’ buyer, businessman Thomas S. Ricketts, in order to sell the franchise in a disguised sale, transferring the team to the partner for cash that was to be distributed to Tribune.

The U.S. Tax Court got it wrong when it found the Tribune’s collection guarantee of senior debt ...