By holding qualified small business stock (“QSBS”), noncorporate shareholders of qualifying C corporations can sell their stock tax free after a five-year holding period. Tax benefits associated with QSBS are nothing new. However, until recently, planning with QSBS has been neglected. The Tax Cuts and Jobs Act (“TCJA”) breathed new life into the potential benefits…
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For a few months, the short and mid-term applicable federal rates have been on the heels of one another. These rates ride with treasury rates and the economy in general. For some reason, here lately the mid-term rates have been lower on occasion than the short-term rates. I even caught myself thinking, is this a…
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In a recent Memorandum opinion issued by the Tax Court, the Court held that the 60-day time limit for individual retirement account (“IRA”) rollovers was met for a distribution and subsequent recontribution of IRA funds despite the funds not being credited back to the IRA upon recontribution until 62 days after the initial distribution. The IRS…
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Introduction This article is the first article in a multi-part series of articles that I will be doing on IRS audits. The purpose of this series is to demystify the audit process, inform readers about how audits are conducted, and provide readers with an understanding of what to expect if selected for examination. This article…
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Timely mailing is timely filing. Seriously, it is. In the case of Curtiss T. Williams, we are reminded of how important it is to ensure compliance and maintain proof of compliance with the mailbox rule of the Internal Revenue Code. While really just a mundane case of a taxpayer getting his petition dismissed due to late filing,…
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Overview The United States Supreme Court issued a unanimous opinion on June 21, 2019 in North Carolina Department of Revenue v. Kimberley Rice Kaestner 1992 Family Trust ruling that a trust beneficiary’s residence alone is not sufficient grounds for a state to tax a trust’s undistributed income. This decision disallowed the assessment of more than…
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The Tax Court’s denial of a $33 million charitable deduction was affirmed by the D.C. Circuit Court of Appeals in a decision handed down on May 24, 2019. While the purported dollar value of the donation makes this case stand out, it involves a number of important issues including gift substantiation, substantial compliance, valuation, and…
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After the Summa Holdings case, the substance over form doctrine was left with a significant black eye by the Sixth Circuit. On May 15, 2019, the Sixth Circuit, upheld a transferee liability claim against shareholders of a Tennessee corporation while also clarifying its holding is Summa Holdings. While the Summa Holdings discussion is certainly interesting, the…
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Can the material participation tests of Section 469 be met remotely? The Tax Court says yes. In a recent Memorandum Opinion, the Tax Court (the “Court”) held that Fred Barbara (“Barbara”) satisfied the requirements for materially participating in his Chicago based business despite living in Florida approximately 60% of the year. The Internal Revenue Service (the…
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Introduction The do-it-yourself (DIY) movement has been very popular in recent years. Some people are attracted to the idea of DIY because they like the feeling of satisfaction that comes with accomplishing a task, whatever it may be. Others perceive DIY as a way to save money (i.e., they are just cheap). Some tasks are…
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