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.
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TOPICS / INDIVIDUALS
Income
Local Lodging Provided to an Employee: How to Determine Whether to Include It in the Employee’s Income
Local lodging typically goes unnoticed from
a payroll perspective.
Debt Discharge Tax Relief Announced for Corinthian Colleges Students
The IRS announced that students who attended schools owned by Corinthian Colleges Inc. and whose debt is discharged under certain Department of Education programs will not have to recognize income on the discharged debt.
Is an Anomaly in Form 8960 Resulting in an Unintended Tax on Tax-Exempt Income?
This article provides an overview of the net investment income tax calculations for individuals and trusts.
The Investor Control Doctrine: When “Hands Off” Really Means “Hands Off”
In a recent tax court decision, an individual was as determined for tax purposes to be the owner of assets in segregated asset accounts held
for the benefit of private placement variable
life insurance policies.
Meeting the 100-Hour Significant Participation Activity Test
One strategy is to alleviate the net investment income tax to fund healthcare is to focus on a taxpayer’s level of participation in an activity so that income may be characterized as nonpassive and thus not subject to the tax.
Rules Target Abuse of “Legging Out” of Foreign Currency Hedges
Final regulations issued on Friday clarify the tax treatment of certain terminations of qualified hedging transactions under Sec. 988.
Directions in Individual Taxation
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.
Identity Theft Protection Services Provided After a Data Breach Are Not Taxable
The announcement applies to anyone whose personal information may have been compromised in a data breach, including customers, employees, and others.
No Deduction for Unpaid Service Fees Related to Ponzi Scheme
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.
Is It Rent? That Depends on the Lease
A recent Tax Court decision sheds light on the importance of lease terms to determine what is rent and how Sec. 467 may apply to advance rents.
Service-Related Earnouts: Contingent Purchase Price vs. Compensation
Consideration for earnout may be based on a seller’s willingness to provide a level of service that results in the transfer of the business interest and relationships to the buyer.
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.
Proposed Slot Machine Safe Harbor Would Allow Gains and Losses to Be Netted
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.
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.
Payments to Egg Donor Not Excludable From Income
The Tax Court ruled that a woman who received payments for undergoing the procedures necessary to donate her eggs could not exclude the payments from gross income as damages for personal injuries or physical sickness under Sec. 104(a)(2).
Safe Harbor Proposed for Calculating Slot Machine Gains and Losses
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.
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.
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.
Taxpayer Has Ordinary Income From Merger-Related Payment
The Tax Court held that part of a payment made to a company’s co-founder and employee in a merger transaction was deferred compensation that was taxable as ordinary income.
employee benefits & pensions
Profits interests: The most tax-efficient equity grant to employees
By granting them a profits interest, entities taxed as partnerships can reward employees with equity. Mistakes, however, could cause challenges from taxing authorities.
