Income Tax Issues
Activity Engaged in for Profit

Walters v. Commissioner
(T.C. Memo. 2022-17)

On March 7, 2022, the Tax Court issued a Memorandum Opinion in the case of Walters v. Commissioner (T.C. Memo. 2022-17). The primary issue presented in Walters v. Commissioner was whether the petitioners’ mutually owned partnership was engaged in for-profit activities in constructing “green” homes. Background to Walters v. Commissioner Petitioner Jessica Walters (petitioner daughter) resided in North Carolina when she timely filed her petition, and petitioners David Walters (petitioner husband) and Jean Walters (petitioner

Read More »
Income Tax Issues
Hobby Losses under IRC § 183

Huff v. Commissioner
T.C. Memo. 2021-140

On December 21, 2021, the Tax Court issued a Memorandum Opinion in the case of Huff v. Commissioner (T.C. Memo. 2021-140). The primary issue presented in Huff was whether the petitioners’ miniature donkey breeding operation was an activity engaged in for profit within the meaning of IRC § 183. Held: Actually, yes. Author’s Note on Huff v. Commissioner Judge Patrick J. Urda (who delivered this opinion) was a Classics major at Notre Dame, where he

Read More »
Income Tax Issues
Activity Engaged in for Profit

The Test for Profit Motive: Allowance of Deductions under IRC § 183 Test

What factors aid the Tax Court in deciding when an activity is entered into with a “profit motive” (with allowable ordinary and necessary expenses) versus a hobby (where losses may be taken only up to the amount of profit received)? Taxpayers can deduct all ordinary and necessary expenses paid or incurred in carrying on a trade or business,[1] for the production or collection of income,[2] or for the management, conservation, or maintenance of property held

Read More »
Income Tax Issues
Business or Personal Losses

Gallegos v. Commissioner
T.C. Memo. 2021-25

On March 2, 2021, the Tax Court issued a Memorandum Opinion in the case of Gallegos v. Commissioner (T.C. Memo. 2021-25). The primary issue presented in Gallegos v. Commissioner was whether the team roping expenses the petitioner claimed on his Schedule C as business losses were business or personal in nature. Giddy-up, ya’ll… Setting the Stage for Gallegos v. Commissioner First, this is a Judge Holmes opinion, so you know it’s going to be gold.

Read More »
Business Related Issues
Activity Engaged in for Profit

Whatley v. Commissioner
T.C. Memo. 2021-11

On January 28, 2021, the Tax Court issued a Memorandum Opinion in the case of Whatley v. Commissioner (T.C. Memo. 2021-11). The issue presented in Whatley v. Commissioner was whether the petitioner’s tree or cattle farm (he can’t seem to decide which) was a trade or business during the years at issue. A Note on my Favorite Jurist, Judge Holmes The opinion begins by describing the petitioner as “a proud Auburn alumnus” who made the

Read More »
Business Related Issues
Hobby Expenses

Costello v. Commissioner
T.C. Memo. 2021-9

On January 25, 2021, the Tax Court issued a Memorandum Opinion in the case of Costello v. Commissioner (T.C. Memo. 2021-9). The primary issues presented in Costello v. Commissioner was whether the would-be-chicken-farmers (petitioners) were entitled to deductions for losses from farming activities, or whether the losses were startup expenses for which IRC § 195 prohibits a current deduction. Author’s Note Schadënfreude is German for happiness at the misfortune of others.  The Greek ἐπιχαιρεκακία is

Read More »
Facebook
Twitter
LinkedIn
Pocket
Email
Print

Most popular tagged posts:

Walters v. Commissioner
(T.C. Memo. 2022-17)

On March 7, 2022, the Tax Court issued a Memorandum Opinion in the case of Walters v. Commissioner (T.C. Memo. 2022-17). The primary issue presented in Walters v. Commissioner was whether the petitioners’ mutually owned partnership was engaged in for-profit activities in constructing “green” homes. Background to Walters v. Commissioner

Read More »

Huff v. Commissioner
T.C. Memo. 2021-140

On December 21, 2021, the Tax Court issued a Memorandum Opinion in the case of Huff v. Commissioner (T.C. Memo. 2021-140). The primary issue presented in Huff was whether the petitioners’ miniature donkey breeding operation was an activity engaged in for profit within the meaning of IRC § 183. Held:

Read More »

Gallegos v. Commissioner
T.C. Memo. 2021-25

On March 2, 2021, the Tax Court issued a Memorandum Opinion in the case of Gallegos v. Commissioner (T.C. Memo. 2021-25). The primary issue presented in Gallegos v. Commissioner was whether the team roping expenses the petitioner claimed on his Schedule C as business losses were business or personal in

Read More »

Whatley v. Commissioner
T.C. Memo. 2021-11

On January 28, 2021, the Tax Court issued a Memorandum Opinion in the case of Whatley v. Commissioner (T.C. Memo. 2021-11). The issue presented in Whatley v. Commissioner was whether the petitioner’s tree or cattle farm (he can’t seem to decide which) was a trade or business during the years

Read More »

Costello v. Commissioner
T.C. Memo. 2021-9

On January 25, 2021, the Tax Court issued a Memorandum Opinion in the case of Costello v. Commissioner (T.C. Memo. 2021-9). The primary issues presented in Costello v. Commissioner was whether the would-be-chicken-farmers (petitioners) were entitled to deductions for losses from farming activities, or whether the losses were startup expenses

Read More »