Archive for the ‘Federal Taxation’ Category

Widow Allowed to Expense Previously Expensed Farming Inputs

Published: January 17th, 2017

By: Brad Gould

In the case of Estate of Backemeyer v. Commissioner, 147 TC 17 (2016), the Tax Court held that the widow of a Nebraska farmer was entitled to expense farming inputs she inherited from her husband, who had expensed the same inputs during his life. Mr. Backemeyer, a corn and soybean farmer, purchased farming inputs consisting of seed, […]

Long-Awaited Proposed Regulations for Section 2704 Issued!

Published: August 2nd, 2016

By: Dana M. Apfelbaum

Section 2704 of the Internal Revenue Code provides for special rules relating to the valuation of transfers of business interests to certain family members for estate, gift, and generation-skipping transfer tax purposes (collectively the “transfer taxes”).  Practically, § 2704 limits the ability to lower the value of a business interest as determined for transfer tax […]

Compensation to Law Firm Shareholder-Employees Disallowed by Tax Court

Published: March 17th, 2016

By: Stephen R. Looney

In Brinks,[1] the Tax Court once again applied the independent investor test to recharacterize compensation paid by a professional corporation, a law firm, to its shareholder-employees as nondeductible dividend distributions, and held the corporation liable for accuracy-related penalties for mischaracterizing the dividends as deductible compensation. This case should serve as a warning for many mid-size […]

Plan to Replant – A Future Without Citrus Greening

Published: February 22nd, 2016

By: Dana M. Apfelbaum

We previously reported on the development of genetically modified citrus trees by IFAS that show enhanced resistance to citrus greening, as well as potentially canker and black spot. While many growers have not replanted groves lost to freeze, hurricanes, citrus canker, and citrus greening due to the ever-looming threat of citrus greening, this new development […]

Court Finds Shareholder Liable in Recent Midco Transaction

Published: January 15th, 2016

By: Stephen R. Looney

In Tricarichi,1 the Tax Court held that the sole shareholder of a corporation was liable as a transferee for the corporation’s unpaid tax liability after he sold his stock in a “Midco” transaction, resulting in a tax deficiency of $15,186,570 and penalties of $6,012,777 under Section 6901 and Ohio fraudulent transfer laws. The taxpayer was […]

Some Sunshine for Florida Citrus Growers in the Battle Against Citrus Greening

Published: November 23rd, 2015

By: Michael D. Minton Brad Gould Dana M. Apfelbaum

Earlier today the University of Florida’s Institute of Food and Agricultural Sciences (IFAS) announced that its researchers have developed genetically modified citrus trees that show enhanced resistance to citrus greening. These citrus trees may also have the potential to resist canker and black spot. IFAS noted that the commercial viability of these new citrus trees […]

Tax Court Holds that Sale of Real Property Resulted in Ordinary Income Rather than Capital Gain

Published: August 26th, 2015

By: Stephen R. Looney

In Fargo,[1] the Tax Court held that a couple had ordinary income from a property sale by a partnership in which they were partners because the property was sold in the ordinary course of business.  The taxpayer, husband and wife, were partners in Girard Development, L.P. (GDLP), an entity subject to the partnership procedures under […]

IRS Issues Proposed Regulations Eliminating Requirement That Service Provider File Copy of Section 83(b) Election with Tax Return

Published: August 11th, 2015

By: Stephen R. Looney

On 7/17/2015, the IRS issued proposed regulations regarding the Section 83(b) election.  Under the general rule of Section 83(a), if, in connection with the performance of services, property is transferred to any person other than the person for whom such services are performed, the excess of the fair market value of the property as of […]