Tax Court: Hedge Fund Bad Debts are Business Deducitions

The Tax Court, in a reviewed opinion by Judge Gustafson, find that the bad debt deductions of a hedge fund manager/employee/investor were associated with his role as the fund manager and therefore were allowable trade or business deductions under Section 166.

Read the opinion here:
Dagres v. Commissioner, 136 T.C. No. 12 (2010).

Tax Court: Transferee Liability Does Not Apply to Intermediary Transaction

The Tax Court, in a memorandum opinion by Judge Cohen, found that IRC § 6901 did not apply to the former shareholders of a closely held C corporation allegedly involved in an Intermediary Transaction tax shelter.

Read the complete opinion here:
Starnes v. Commissioner, T.C. Memo 2011-36

Tax Court: Co-op Owner Cannot Deduct Casualty Losses

The Tax Court, in a reviewed opinion by Judge Chiechi, finds that a shareholder in a cooperative housing corporation may not deduct losses incurred by the co-op and distributed among the shareholders under section 165(c)(3) or section 216(a).

Read the opinion here.
Alphonso v. Commissioner, 136 T.C. No. 11 (2011)

Federal Circuit: 6 Year Statute of Limitations Applies to Overstatements of Basis

The Federal Circuit relies upon Mayo Foundation to find for the government on the 6 year statute of limitations issue in Grapevine v. United States, Docket 08-5090 (Fed. Cir., March 11, 2011). The Grapevine rationale differs from that put forth by the same court in Salman Ranch Ltd. v. United States, No. 2008-5053 (Fed. Cir. July 30, 2009), (when it found for the taxpayer) and by the other circuits who have considered the same issue.

For commentary on this opinion visit Tax Appellate Blog.

Read the opinion here:
Grapevine v. United States, Docket 08-5090 (Fed. Cir., March 11, 2011)