Gains & Losses

CCA Affects Taxpayer’s Ability to Qualify as a Real Estate Professional

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.

Personal Goodwill: Alive and Well Indeed!

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.

Assignment of Rights in Lawsuit Results in Capital Gain

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.

Capital Gains Treatment for Patent Royalties Denied

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.

Land Sales: Is the Taxpayer Considered a Dealer or Investor?

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.

Qualified Dividends and Capital Gains Flowchart

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.

Like-Kind Exchange Rules: Continued Evolution

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.

Real Estate Professionals: Avoiding the Passive Activity Loss Rules

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.

Current Developments for Straddle Transactions

This item provides a brief background and summary of IRS regulations clarifying whether an obligor’s debt could be part of a straddle and the treatment of prestraddle gain or loss related to a position that is part of a “mixed straddle”.

Newsletter Articles

SPONSORED REPORT

How the Election May Affect Taxation of Business Income

This report summarizes recent proposals to reform the U.S. business income tax system and considers the path to enactment of any such legislation.

PRACTICE MANAGEMENT

CPAs Contend With Tax ID Theft

Tax-related identity theft fraud remains a widespread problem that is often difficult for victims and their tax preparers to correct.