This article covers recent developments in the area of individual taxation arranged in Code section order.
Gains & Losses
Having an activity classified as passive is not a good result for most taxpayers since they cannot carry back or forward losses under the net operating loss rules.
Court held that heirs to the Campbell Soup fortune had a zero basis in the stock of insurance companies they received when the companies demutualized.
Final regulations issued on Friday clarify the tax treatment of certain terminations of qualified hedging transactions under Sec. 988.
This article covers recent developments in the area of individual taxation, including the treatment of support payments and IRA and qualified plan distributions, the Sec. 469 material participation rules, and the taxability of state economic development credits.
The Tax Court disallowed a taxpayer’s claimed loss, which consisted of payments owed him for services he provided to a company that was part of a Ponzi scheme.
A proposed revenue procedure would permit gamblers engaging in electronically tracked slot machine play an optional safe-harbor method to determine a wagering gain or loss from their slot machine play based on daylong play sessions.
Based on recent Chief Counsel Advice, some taxpayers may need to reevaluate whether they will meet the definition of real estate professional. The results of this analysis may have a significant impact on a taxpayer's treatment of the income from rental real estate activities under Secs. 469 and 1411.
Recent Tax Court decisions illustrate that with the right facts, the sale of personal goodwill, as an asset separate from corporate-owned goodwill, should withstand challenge.
A proposed revenue procedure would permit gamblers engaging in electronically tracked slot machine play an optional safe harbor method to determine a wagering gain or loss from their slot machine play based on day-long play sessions.
The Eleventh Circuit held that a taxpayer's assignment of his rights in an ongoing lawsuit over a land sales contract was the sale of a right to purchase the land subject to the contract, not the sale of the land, and resulted in long-term capital gains to the taxpayer.
Net Investment Income Tax Surprise: Significant Participation Rule Trumping Material Participation Tests
The significant participation rule threatens to swallow broader material participation tests under Sec. 469 for taxpayers applying passive loss rules.
The Tax Court held that a taxpayer had not transferred all substantial rights in patents to an unrelated corporation because he was in control of the corporation; therefore, he was not entitled to capital gain treatment under Sec. 1235 for royalties on the patents that the corporation paid to him.
Recent court decisions are reminders that land may not always be a capital asset that gives rise to a capital gain when sold. Land may also be held for sale to customers in the ordinary course of business, in which case gain on the sale of the land will be ordinary income.
The IRS issued final regulationsaddressing the time for recognizing gain or loss accruing up to the date a taxpayer enters into an identified mixed straddle for such positions identified after Aug. 18, 2014.
The interaction of Secs. 469 and 1411 present special challenges for real estate professionals and their advisers.
The capital gain tax computation seemingly should be easy, but often it is not. The flowchart in this article is designed to quickly determine the tax on capital gains and dividends, based on the taxpayer's taxable income.
For many years, taxpayers have been able to defer recognition of gain on the disposition of assets by engaging in Sec. 1031 like-kind exchanges. Consequently, many questions and issues surrounding these transactions have been addressed, but many cases and rulings continue to arise each year. This article analyzes these cases and rulings and identifies questions that still need to be answered.
Qualifying as real estate professionals allows taxpayers to avoid having their rental real estate activities treated as per se passive. This article discusses the requirements for qualifying as a real estate professional and how the requirements have been interpreted by the IRS and the courts.
The Eleventh Circuit upheld a deficiency notice of more than $5 million against a taxpayer who reported adjusted gross income of $22,921 and taxable income of $13,221 on his late-filed 2006 return.