The Tax Court (Judge Haines) holds that under Sec. 1256 a foreign currency call option is not a foreign currency contract and the marked-to-market provisions of Sec. 1256 do not apply to allow a loss on assignment of the option to a charity.
Category Archives: Federal
District Court: Tax Effect of a Son of Boss Transaction Denied
In a lengthy opinion, the United States District Court for the District of Massachusetts disallowed the tax benefits accruing from a Son of Boss transaction promoted by KPMG and entered into by the former U.S. Ambassador to Ireland, Richard Egan.
Fidelity International Currency Advisor A Fund, LLC v. United States, Docket 05-40151 et. al. (D. Mass May 17, 2010)
Step Transaction Applies to LLC Interest Transfers for Gift Tax Purposes
The Tax Court holds that the step transaction doctrine applies to the transfer of interests in an LLC for gift tax purposes.
Read the opinion here:
Pierre v. Commissioner, T.C. Memo 2010-106 (2010)
Ringgold Telephone Co. v. Commissioner
Tax Court: No Beneficial Ownership of Corporate Assets at Death
The Tax Court rejected the government’s beneficial ownership argument and found that petitioner did not have a property interest in income producing warehouses at death. Thus, the value of the those warehouses was not includable in his estate for estate tax purposes under Section 2031.
Tax Court: Intermountain Insurance Service of Vail LLC v. Commissioner
District Court: KPMG Transaction Lacked Economic Substance
Mississippi District Court finds that FOCus transaction was a series of steps lacking in economic substance and comprising an abusive tax shelter. Penalties imposed.
Nevada Partners Fund LLC v. United States, No. 3:06cv379-HTW-MTP (S.D. Miss., Apr. 30, 2010)
Proctor & Gamble v. United States
Sixth Circuit reverses and remands the District Court in an unpublished opinion that also denies Proctor & Gamble’s refund claim.
Proctor & Gamble v. United States, No 08-4078 (6th Cir. Apr. 28, 2010)
Second Circuit: Partnership Draws are Wages Subject to Levy
The Second Circuit Court of Appeals affirms the District Court holding that partnership draws are wages under Section 6331, subject to administrative levy and levy enforcement.
United States v. Moskowitz, Passman & Edelman, No. 08-3017-cv (2nd Cir. Apr. 29, 10)
10th Circuit: Warranty Income Cannot be Measured by Percentage of Completion
The Tenth Circuit reverses and remands to the District Court. The percentage of completion method of accounting cannot be used to record income from a warranty.
Koch Industries v. United States, Docket 08-3347 (10th Cir. Apr. 27, 2010)