Tax Blog

Income Earned by Child Taxed to Parent

If a minor child earns income, is the income taxable to the parent or the child?  There have been quite a few tax disputes involving this question.  The Ray v. Commissioner, T.C. Memo ...
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Conservation Easement Denied for Private Golf Course

Tax benefits can cause investors to put money were they otherwise would not.  The conservation easement is one example.  Conservation easements reward investors with charitable deductions for putting money into projects that ...
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Line of Credit Standby Fees, to Deduct or to Capitalize?

Many businesses rely on a standby line of credit to cover their expenses, to weather downturns, and to grow.  But this credit can be expensive in terms of interest and fees. The ...
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Court Says Partnership is Worth Less, Not Entirely Worthless

The IRS often challenges tax loss deductions.  In many cases, it does so by challenging the year in which the loss is allowable.  It can be difficult to determine which year the ...
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IRS Audits for Car & Truck Expenses, What You Need to Know

There are a number of issues that the IRS frequently examines on audit.  Car and truck expenses are high on that list.  The applicable rules and court cases must be reviewed before ...
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Intercompany Fee Arrangement Lacks Economic Substance

If the employees and owners of a profitable C corporation set up a related entity and lease the employee-owner’s services back to the C corporation, can the C corporation deduct the payments?  ...
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Conversations Between Spouses Not Evidence of Tax Crimes

Can the IRS record conversations between a husband and wife and use the recordings as evidence for tax crimes?  The court addressed this in United States v. Fomichev, No. 16-50227 (9th Cir. 2018) ...
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The Trade or Business Requirement for the Sec. 199A Deduction

The new Sec. 199A deduction that provides a 20 percent benefit for flow through entities has been in the news as of late.  The Yaryan v. Commissioner, T.C. Memo. 2018-129, case provides an ...
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Litigation Award for Damage to Dairy Farm Ordinary Not Capital

If a dairy farmer receives an award for damages to the farm, is the damage award capital or ordinary?  The distinction is important.  Unlike ordinary income, capital gains are generally afforded lower tax ...
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Discharging Unpaid Taxes in Bankruptcy

There are circumstances when unpaid taxes can be discharged in bankruptcy.  The recent United States v. Mayer, No. 16-626-RGA (D. Del. 2018), case provides an opportunity to consider these bankruptcy-tax rules. Facts & Procedural ...
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