The Tax Court ruled that a couple who sold a house they had never lived in could not take advantage of the Sec. 121 exclusion.
Advertisement
TOPICS
Individuals
Rules Issued on Income Deferral of Canceled Debt
The IRS issued temporary and proposed regulations relating to taxpayer elections to defer recognition of cancellation of debt income.
Tax Court Rules on Medical Necessities
The Tax Court has expanded the scope of the medical expense deduction and the definition of what is “medically necessary.” This case establishes the precedent that gender identity disorder is a mental disorder (disease) for purposes of the medical expense deduction.
Per Diem Travel Rates Updated
The IRS issued updated federal per diem rates and procedures for substantiating deductible expenses or employer-paid allowances for lodging, meals, and incidental expenses incurred in business-related travel away from home.
Adoption Tax Credit Guidance Released
The IRS issued interim guidance September 29 on the child adoption credit and income exclusion for employer reimbursements of adoption expenses, as expanded by the Patient Protection and Affordable Care Act.
Treasury Announces Low-Cost Financial Account Program for Taxpayers
Treasury announced the launch of a pilot program to provide taxpayers with access to low-cost financial accounts.
Deducting Success-Based Financial Advisory Fees
The deduction of success-based financial advisory fees related to business transactions has been, and continues to be, an area of significant taxpayer uncertainty.
Tax Treatment of Expenses Incurred by Individuals Temporarily Out of Work
This article examines the tax treatment of expenses incurred by individuals who are temporarily out of work.
Closing Date Deadline for Homebuyer Credit Extended to September 30
The Homebuyer Assistance and Improvement Act extends the closing date deadline to qualify for the first-time homebuyer credit from June 30, 2010, to September 30, 2010.
Taxpayer Denied Exclusion for Gain on the Sale of a Principal Residence
The Tax Court held that taxpayers who demolished a home they had lived in for more than two years, built a new home on the same lot, and then sold the new home without ever living in it were not entitled to exclude the gain from the sale from income under Sec. 121.
Rules Issued for Income Deferral of Canceled Debt
The IRS issued temporary and proposed regulations relating to taxpayer elections to defer recognition of cancellation of debt (COD) income.
Dependency Exemption Issues for College Students
Parents and tax professionals can no longer assume that a college student will remain a dependent of the parent until he or she graduates. With the variety of funding sources students use to pay for the ever-increasing cost of higher education, many are likely to provide over one-half of their support at some point during their college years.
Regs. Limiting Period for Filing Innocent Spouse Claim Held Valid
Reversing the Tax Court, the Seventh Circuit held that the two-year limitation period for filing an equitable innocent spouse claim under Sec. 6015(f) in Regs. Sec. 1.6015-5(b)(1) was valid.
Case Studies for Book-Tax Differences in the Classroom
The authors discuss how to most effectively cover book-tax differences in financial accounting and tax courses and how to prepare accounting graduates for this type of work in the profession.
IRS Issues Regs. on New Indoor Tanning Tax
On June 11, the IRS issued final, temporary, and proposed regulations to provide guidance on the new 10% indoor tanning services excise tax (T.D. 9486; REG-112841-10).
Appeals Court Overturns Taxpayer Win in Tax Shelter Case
The Tenth Circuit held that a taxpayer’s investment in a “son of boss” tax shelter lacked economic substance and therefore did not generate deductible losses, reversing a taxpayer win on the issue in which a district court had allowed the taxpayer to deduct losses from the investment.
Closing Date Deadline for Homebuyer Credit Extended to Sept. 30
The Homebuyer Assistance and Improvement Act of 2010 extends the closing date deadline to qualify for the first-time homebuyer credit under Sec. 36 to September 30, 2010.
Tax Benefits for Education
An array of tax benefits are available to taxpayers, including income exclusions for educational assistance, scholarships, and distributions from qualified tuition plans and educational IRAs, as well as credits for tuition and certain education-related expenses and a deduction for tuition payments.
Guidance on Health Coverage for Adult Dependents
An IRS notice and interim final rules provide guidance on the tax treatment of health coverage for children who have not yet turned 27.
IRS Issues Regulations on New Indoor Tanning Tax
The IRS issued final, temporary and proposed regulations to provide guidance on the new 10% indoor tanning services excise tax
INDIVIDUALS
Current Developments in Taxation of Individuals: Part 1
This update surveys recent federal tax developments involving individuals, including court cases, rulings, and guidance issued during the six months ending October 2025.
