One of the most difficult aspects of state and local tax practice is the lack of publicly available guidance addressing a client’s situation. One potentially rich source of guidance are orders issued by administrative tribunals in taxpayer appeals. These orders are similar in form and function to judicial opinions. Unlike judicial opinions, however, these orders…
Read More
Background Surprising to many, qualified retirement accounts received by a spouse in divorce may lose creditor protection, a significant beneficial feature of retirement accounts. In the case of In re Lerbakken, filed on October 16, 2018, the Bankruptcy Appellate Panel of the Eighth Circuit held that qualified accounts received by the non-participant spouse pursuant to…
Read More
Background In a recent case out of the Seventh Circuit, a large corporate taxpayer lost a involving three like-kind transactions under IRC 1031. Applying the substance over form doctrine, the Court upheld the imposedtax liability of approximately $437,000,000 and accuracy related penalties under IRC 6662(a) of approximately $87,000,000. In this case, Exelon Corporation (“Exelon”) sold…
Read More
Overview In a recent Tax Court decision handed down in a Memorandum opinion, the Internal Revenue Service (“IRS”) showed that it will continue to be aggressive in denying charitable deductions for transactions they might view as taking abuse of the charitable deduction available under Internal Revenue Code (“IRC”) §170. In Chrem v. Comm’r, TC Memo…
Read More
Last week the Tax Court handed down its opinion in Melasky v. Comm’r, 151 T.C. 9 (Oct. 10, 2018). The important issue in Melasky relates to the application of the proceeds of a levy. Four days prior to the date the levy was made, the taxpayer hand-delivered a check to the IRS and properly designated…
Read More
On September 20th, 2018, the Tax Court issued its memorandum decision granting a partial summary judgment in favor of the Internal Revenue Service (“IRS”). This decision arrives after a series of other decisions relating not about the traditional valuation disputes and battles of the experts, but instead a quick “gotcha” by the IRS negating the…
Read More
The Tax Court recently struck down another conservation easement under Internal Revenue Code (“IRC”) IRC § 170(h). This case follows several other high-profile conservation easements that have been struck down recently. IRC § 170(h) and the related Treasury Regulations contain a myriad of technical requirements in order for an easement to qualify for the deduction,…
Read More
The Tax Cuts and Jobs Act (“TCJA”) is arguably the most significant tax legislation passed by Congress since last revision of the Internal Revenue Code in 1986. The legislation fundamentally altered the Code by reducing or eliminating many longstanding, popular deductions and credits while expanding others and creating new ones. Much has been written about…
Read More
Introduction In tax planning, it always has been important to determine whether an activity qualifies as a “trade or business.” There are a number of consequences. An important consequence is being able to deduct “ordinary and necessary” business expenses under Sec. 162. Others are the applicability of the 3.8% net investment income tax, hobby loss…
Read More
In the recent Harbor Lofts case, the Tax Court clarified that a long-term lessee of real property is not entitled to take a deduction with respect to a grant of a conservation easement on that same property.With this case, we are reminded again that easements can be completely denied, even when a substantial interest in…
Read More