Income Tax Issues
Books and Records

Safaryan v. Commissioner
T.C. Memo. 2021-138

On December 13, 2021, the Tax Court issued a Memorandum Opinion in the case of Safaryan v. Commissioner (T.C. Memo. 2021-138). The primary issue presented in Safaryan was whether the petitioners were entitled to deduct certain Schedule C expenses for car and truck expenses, travel expenses, and “other” expenses. Held: Not so much. Background to Safaryan v. Commissioner In 2012 or 2013 the petitioner-husband purchased 10 acres of property in Newberry Springs, California. The property

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Scott St. Amand April 24, 2022
Income Tax Issues
Deductions

Estate of Morgan v. Commissioner
T.C. Memo. 2021-104

On August 23, 2021, the Tax Court issued a Memorandum Opinion in the case of Estate of Morgan v. Commissioner (T.C. Memo. 2021-104). The primary issues presented in Estate of Morgan were whether the petitioners (1) are entitled to deductions claimed on Schedule C for expenses incurred by Falcon, LLC (Falcon), and Falcon Legacy, LLC (Legacy); (2) are entitled to a net operating loss deduction attributable to an alleged NOL carryover from tax years 2010

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Scott St. Amand October 3, 2021
Income Tax Issues
Capital Expenditures

Deducting Legal and Professional Fees

Income tax deductions are rather like hard truths. A client may not want to hear that an item is not deductible, but you know in your heart of hearts that you cannot, in good conscience, advise them otherwise. No doctor relishes the prospect of telling a patient that he is terminal. Often met with a similar grief-stricken reaction, explaining to a client that the “big ticket” deduction that they wanted to claim (or in my

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Scott St. Amand April 29, 2021
Business Related Issues
Burden of Proof

Berry v. Commissioner
T.C. Memo. 2021-42

On April 7, 2021, the Tax Court issued a Memorandum Opinion in the case of Berry v. Commissioner (T.C. Memo. 2021-42). The primary issues presented in Berry v. Commissioner were whether the petitioners S corporation underreported its income, whether the petitioners’ S corporation is entitled to certain claimed deductions, whether the petitioners are entitled to certain claimed deductions, and whether the petitioners are liable for accuracy-related penalties under IRC § 6662. Background to Berry v.

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Scott St. Amand April 7, 2021
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

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Scott St. Amand January 25, 2021
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Safaryan v. Commissioner
T.C. Memo. 2021-138

On December 13, 2021, the Tax Court issued a Memorandum Opinion in the case of Safaryan v. Commissioner (T.C. Memo. 2021-138). The primary issue presented in Safaryan was whether the petitioners were entitled to deduct certain Schedule C expenses for car and truck expenses, travel expenses, and “other” expenses. Held:

Read More »
Scott St. Amand April 24, 2022

Estate of Morgan v. Commissioner
T.C. Memo. 2021-104

On August 23, 2021, the Tax Court issued a Memorandum Opinion in the case of Estate of Morgan v. Commissioner (T.C. Memo. 2021-104). The primary issues presented in Estate of Morgan were whether the petitioners (1) are entitled to deductions claimed on Schedule C for expenses incurred by Falcon, LLC

Read More »
Scott St. Amand October 3, 2021

Deducting Legal and Professional Fees

Income tax deductions are rather like hard truths. A client may not want to hear that an item is not deductible, but you know in your heart of hearts that you cannot, in good conscience, advise them otherwise. No doctor relishes the prospect of telling a patient that he is

Read More »
Scott St. Amand April 29, 2021

Berry v. Commissioner
T.C. Memo. 2021-42

On April 7, 2021, the Tax Court issued a Memorandum Opinion in the case of Berry v. Commissioner (T.C. Memo. 2021-42). The primary issues presented in Berry v. Commissioner were whether the petitioners S corporation underreported its income, whether the petitioners’ S corporation is entitled to certain claimed deductions, whether

Read More »
Scott St. Amand April 7, 2021

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 »
Scott St. Amand January 25, 2021