Overview In a recent Tax Court decision handed down in a Memorandum opinion, the Internal Revenue Service (“IRS”) showed that it will continue to be aggressive in denying charitable deductions for transactions they might view as taking abuse of the charitable deduction available under Internal Revenue Code (“IRC”) §170. In Chrem v. Comm’r, TC Memo…
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Last week the Tax Court handed down its opinion in Melasky v. Comm’r, 151 T.C. 9 (Oct. 10, 2018). The important issue in Melasky relates to the application of the proceeds of a levy. Four days prior to the date the levy was made, the taxpayer hand-delivered a check to the IRS and properly designated…
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On September 20th, 2018, the Tax Court issued its memorandum decision granting a partial summary judgment in favor of the Internal Revenue Service (“IRS”). This decision arrives after a series of other decisions relating not about the traditional valuation disputes and battles of the experts, but instead a quick “gotcha” by the IRS negating the…
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The Tax Court recently struck down another conservation easement under Internal Revenue Code (“IRC”) IRC § 170(h). This case follows several other high-profile conservation easements that have been struck down recently. IRC § 170(h) and the related Treasury Regulations contain a myriad of technical requirements in order for an easement to qualify for the deduction,…
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The Tax Cuts and Jobs Act (“TCJA”) is arguably the most significant tax legislation passed by Congress since last revision of the Internal Revenue Code in 1986. The legislation fundamentally altered the Code by reducing or eliminating many longstanding, popular deductions and credits while expanding others and creating new ones. Much has been written about…
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Introduction In tax planning, it always has been important to determine whether an activity qualifies as a “trade or business.” There are a number of consequences. An important consequence is being able to deduct “ordinary and necessary” business expenses under Sec. 162. Others are the applicability of the 3.8% net investment income tax, hobby loss…
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In the recent Harbor Lofts case, the Tax Court clarified that a long-term lessee of real property is not entitled to take a deduction with respect to a grant of a conservation easement on that same property.With this case, we are reminded again that easements can be completely denied, even when a substantial interest in…
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The Internal Revenue Service (“IRS”) recently issued proposed regulations on the new deduction for qualified business income (“QBI”) under new Code section 199A. Among other things, the proposed regulations address the hotly debated interpretive issue regarding the term “specified service trade or business” (“SSTB”). SSTB is a key term under section 199A because, if an…
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On August 14, 2018 the 5th Circuit upheld the Tax Court’s September 9, 2016 bench opinion in PBBM-Rose Hill, LTD v. Comm’r. The case involved a $15,160,000 conservation easement deduction under IRC § 170(h) that was denied based on a technicality relating to strict compliance with the extinguishment regulations under Treas. Reg. § 1.170A-14(g)(6)(i) and a rejection of…
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Where does your trust reside? Does it reside in more than one state? Does it reside nowhere? What are the implications of a trust’s residence? One important implication is how the trust will be taxed for state income tax purposes. With a varied approach to the income taxation of trusts among the states, it is…
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