Penalties Under the Code
Tax Opinions / Memorandum Opinions / Penalties Under the Code

Duffy v. Commissioner
T.C. Memo. 2020-108

On July 13, 2020, the Tax Court issued a Memorandum Opinion in the case of Duffy v. Commissioner (T.C. Memo. 2020-108). The primary issue before the court in Duffy v. Commissioner was whether, because the petitioners’ debt to the bank was nonrecourse, the discharge of indebtedness was included in the petitioners amount realized on the sale of the property and did not give rise to cancellation of indebtedness income under Treas. Reg. § 1.1001-2(a). A secondary issue was whether the supervisor who signed the penalty approval form was required to be the direct supervisor of the individual proposing the penalty. Background to Duffy v. Commissioner Petitioners bought a home in 2006 for $2m, paying the sellers a total of $431,000, but being unable to pay the remaining balance. In 2008, when the loan became due, they borrowed $1.4m from JPMorgan Chase Bank (JPMC). Petitioners sold the home in March 2011…

0 Comments
July 13, 2020
Read more about the article Smith Lake LLC v. Commissioner <section> T.C. Memo. 2020-107 </section>
Tax Opinions / Charitable Issues / Memorandum Opinions

Smith Lake LLC v. Commissioner
T.C. Memo. 2020-107

On July 13, 2020, the Tax Court issued a Memorandum Opinion in the case of Smith Lake LLC v. Commissioner (T.C. Memo. 2020-107). The primary issue before the court in Smith Lake LLC v. Commissioner was whether the IRS properly disallowed the charitable contribution deduction with respect to the donation of a conservation easement in full because the conservation purpose underlying the easements was not “protected in perpetuity” as required by IRC § 170(h)(5)(A), insofar as the charitable grantee was not absolutely entitled to a proportionate share of the proceeds in the event the property was sold following a judicial extinguishment of the easement. Issues in Smith Lake LLC v. Commissioner The questions of law are identical to those presented in PBBM-Rose Hill, Ltd. v. Commissioner, 900 F.3d 193 (5th Cir. 2018); Oakbrook Land Holdings, LLC v. Commissioner, 154 T.C. No. 10 (May 12, 2020); Coal Prop. Holdings, LLC v. Commissioner,…

1 Comment
July 13, 2020