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Archive for the ‘Internal Revenue Service’ Category

ESOP Participants Treated as Related Persons for Deduction Deferral Purposes Under Section 267(a)(2)

Published: October 13th, 2017

By: Stephen R. Looney

Section 267(a)(2) contains a matching rule which requires that deductions resulting from items of expense and interest may not be taken in an earlier taxable year from the one in which the payee includes such item is gross income if the payor and payee are “related persons” within the meaning of Section 267(b).  Accordingly, whether […]

Stock Surrender and Repurchase Lacks Economic Substance

Published: September 27th, 2017

By: Stephen R. Looney

It has long been a basic tenet of federal tax law that, in order to be respected for tax purposes, a transaction must have economic substance.  In a recent decision, the Tax Court once again held that a purported sale or exchange lacking in economic substance will not be respected.  The case also demonstrates that […]

Florida’s Water Crises: Can We Afford The Solutions? (Part III)

Published: July 10th, 2017

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

As we’ve discussed in Part I and Part II, the renewed focus on water projects due to discharges from Lake Okeechobee and the occurrences of blue/green algae is accompanied by a renewed effort to involve private landowners in the development of water attenuation projects. We’ve now explored the exceptions to the general rule that government […]

Part III: Passive Activity Loss Limitation and Real Estate Professional Tax Rules

Published: June 21st, 2017

By: Stephen R. Looney

In Part III of the series, we continue to look at the passive activity loss limitation rules to clarify what constitutes a real estate professional for the purpose of rental property losses. In Part I and Part II of this series, the court found the taxpayers did not qualify as real estate professionals. However, Zarrinnegar […]

Part II: Passive Activity Loss Limitation and Real Estate Professional Tax Rules

Published: June 7th, 2017

By: Stephen R. Looney

In Part I, we discussed the passive activity and loss limitation rules and how they can affect real estate losses. In Jones vs. Comm’r, the taxpayer failed to provide logs from their insurance job, which resulted in a non-qualification as a real estate professional. This week, we look at the Makhlouf v. Comm’r case, which […]

Part I: Passive Activity Loss Limitation and Real Estate Professional Tax Rules

Published: May 18th, 2017

By: Stephen R. Looney

Taxpayers who engage in rental real estate activities will generally seek to have rental property losses from such activities characterized as non-passive. In several recent decisions, the Tax Court once again emphasized the importance of taxpayers being able to substantiate the time they claim to spend performing rental real estate services in order to qualify […]

Tax Court Holds Income was Improperly Attributed to S Corporation

Published: March 28th, 2017

By: Stephen R. Looney

In a recent case, the Tax Court addressed the issue of whether income should be reported by a Taxpayer providing services or an S corporation established by the Taxpayer. Taxpayers often seek to report income generated from services provided through an S corporation on such S corporation’s tax return, but as the case below demonstrates, […]

IRS’s Informal S Corporation No-Rule List Includes Three New Items

Published: March 16th, 2017

By: Stephen R. Looney

A taxpayer may, for a fee, request a written letter ruling from the IRS interpreting and applying tax laws to the taxpayer’s represented set of facts. However, there are some issues in which the IRS will not issue a letter ruling. Taxpayers should note that the IRS has recently added three new issues to its […]