4th Circuit: Tax Court Reversed on Historic Rehab Credits

Posted on April 1, 2011 by admin

The Fourth Circuit Court of Appeals reversed the Tax Court and remanded for further proceedings. The appellate court held that the transfers between investor partners and the partnership were not non-taxable capital contributions followed by partnership distributions as previously determined by the Tax Court but rather were disguised sales of state tax credits subject to tax.

Read the Fourth Circuit’s opinion here.
Virginia Historic Tax Credit Fund 2001 LP v. Commissioner, No. 10-1333 (4th Cir., March 29, 2011)

Read the Tax Court opinion here.
Virginia Historic Tax Credit Fund 2001 LP v. Commissioner, TC Memo. 2009-295

Tax Court: Hedge Fund Bad Debts are Business Deducitions

Posted on March 29, 2011 by admin

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

Posted on March 25, 2011 by admin

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

Posted on March 17, 2011 by admin

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

Posted on March 15, 2011 by admin

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)

Tax Court: Settlement Payments are not Casualty Losses

Posted on March 11, 2011 by admin

The Tax Court holds that payments made to settle automobile accident claims are not deductible casualty losses.

Read the decision here:
Pang v. Commissioner, TC Memo. 2011-55

Tax Court: 6 Year Statute for Fraud Does Not Apply

Posted on March 10, 2011 by admin

The Tax Court (Judge Foley) finds that the extended six-year statute of limitation for fraud did not apply in a business trust case.

Read the opinion here:
Charlton v. Commissioner, TC Memo. 2011-51

Tax Court: CARDS Tax Transaction Losses Denied, Penalties Affirmed

Posted on March 9, 2011 by admin

The Tax Court disallows losses generated by a CARDS tax shelter (Custom Adjustable Rate Debt Structure) and affirms imposition of a 40% penalty.

Read the opinion here:
Kerman v. Commissioner, TC Memo. 2011-54

Tax Court: Real Property Improvements under Section 199 Analyzed

Posted on February 28, 2011 by admin

The Tax Court rules whether a number of different activities performed on real property qualify as deductible domestic production gross receipts under Section 199.

Read the opinion here:
Gibson v. Commissioner, 136 T.C. No. 10 (2011)

In re FedEx Ground

Posted on February 18, 2011 by admin

The District Court for the Nothern District of Indiana denies a motion for immediate appeal of 12 consolidated cases filed against FedEx Ground. The question before each of the consolidated cases was whether FedEx drivers were independent contractors or employees, the latter of which would subject the company and drivers to state and federal employment taxes.

Read the decision here:
In re FedEx Ground, No. 3:05-MD-527 RM (N.D. Ind. Feb. 11, 2011)