Income Tax Issues
Income Tax Issues / Memorandum Opinions / Tax Opinions

Estate of Morrissette v. Commissioner
T.C. Memo. 2021-60

On May 12, 2021, the Tax Court issued a Memorandum Opinion in the case of Estate of Morrissette v. Commissioner (T.C. Memo. 2021-60). The primary issue presented in Estate of Morrissette v. Commissioner was whether IRC § 2036 or IRC § 2038 applies to recapture significant inter vivos transfers made as part of the split-dollar agreements, and, if not, whether the special valuation rule of IRC § 2703 applies to require that the valuation disregard a provision in the split-dollar agreements that restricts the parties’ right to unilaterally terminate the agreements. Initial Clarification in Estate of Morrissette v. Commissioner The decedent does not, as far as I could discern from my research, bear any relation to the Canadian-American singer-songwriter Alanis Morissette, who known as much for her emotive mezzo-soprano voice as her utter failure to be able to appropriately distinguish between events that are unfortunate and those that are, actually, Ironic.…

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May 12, 2021
Income Tax Issues
Income Tax Issues / Memorandum Opinions / Tax Opinions

BRC Operating Company LLC v. Commissioner
T.C. Memo. 2021-59

On May 12, 2021, the Tax Court issued a Memorandum Opinion in the case of BRC Operating Company LLC v. Commissioner (T.C. Memo. 2021-59). The primary issue presented in BRC Operating Company LLC v. Commissioner was whether and when a cost of goods sold (COGS) offset may be recognized for tax purposes. Background to BRC Operating Company LLC v. Commissioner During tax years 2008 and 2009 the petitioner paid approximately $180 million to acquire hundreds of thousands of acres of minerals and lease interests in West Virginia, Pennsylvania, Ohio, and Kentucky (leases). The petitioner reported, as costs of goods sold, estimated drilling costs for natural gas exploration and mining. The amounts in issue claimed as costs of goods sold are $100 million for tax year 2008 and $60 million for tax year 2009. It should be noted that the petitioner did not drill, receive drilling services from third parties, or receive…

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May 12, 2021