Ordinary and Necessary Business Expenses

Income Tax Issues
Deductions

Clary Hood Inc. v. Commissioner (T.C. Memo. 2022-15)

On March 2, 2022, the Tax Court issued a Memorandum Opinion in the case of Clary Hood Inc. v. Commissioner (T.C. Memo. 2022-15). The primary issue presented in Clary Hood Inc. was the amount the petitioner may deduct under IRC § 162(a)(1) as reasonable compensation paid to its chief executive officer (CEO) and shareholder Clary L. Hood (Mr. Hood) during the years at issue. Background to Clary Hood Inc. v. Commissioner According to Judge Greaves

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Scott St. Amand May 24, 2022
Income Tax Issues
Books and Records

Harwood v. Commissioner (T.C. Memo. 2022-8)

On February 15, 2022, the Tax Court issued a Memorandum Opinion in the case of Harwood v. Commissioner (T.C. Memo. 2022-8). The primary issue presented in Harwood was whether the taxpayer adequately substantiated his deductions for travel, residence, and “other” such deductions. Background to Harwood v. Commissioner During the years at issue, Mr. Harwood worked as a steamfitter and brazier on construction projects in Washington and Oregon. Mr. Harwood joined Plumber and Steamfitters Local 598

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Scott St. Amand May 13, 2022
Income Tax Issues
Books and Records

Elbasha v. Commissioner (T.C. Memo. 2022-1)

On January 12, 2022, the Tax Court issued a Memorandum Opinion in the case of Elbasha v. Commissioner (T.C. Memo. 2022-1). The primary issues presented in Elbasha were the petitioner’s filing status and whether and to what extent the petitioner can deduct Schedule C expenses. Background The petitioner, an emergency room doctor, was born in Sudan, and he had family there during 2008 and 2009—the years at issue. The petitioner’s Sudanese family included his wife,

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Scott St. Amand May 4, 2022
Income Tax Issues
Activity Engaged in for Profit

Skolnick v. Commissioner (T.C. Memo. 2021-139)

On December 16, 2021, the Tax Court issued a Memorandum Opinion in the case of Skolnick v. Commissioner (T.C. Memo. 2021-139). The primary issue presented in Skolnick was whether the petitioner’s “horse activity,” undertaken through his LLC, was an activity not engaged in for profit within the meaning of IRC § 183 during 2010-2013. Held: Petitioners were just horsing around, but they had reasonable cause to avoid the accuracy-related penalties. On Horse Breeding and Miniature

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Scott St. Amand April 25, 2022
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
IRC § 183

Gaston v. Commissioner (T.C. Memo. 2021-107)

On September 2, 2021, the Tax Court issued a Memorandum Opinion in the case of Gaston v. Commissioner (T.C. Memo. 2021-107). The primary issue presented in Gaston was whether the petitioner engaged in acting as a trade or business in the tax years at issue and, if so, whether the petitioner is entitled to deduct any reported expenses relating to that trade or business. Background: A Pink Cadillac The petitioner is a former national sales

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Scott St. Amand October 6, 2021
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
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Clary Hood Inc. v. Commissioner (T.C. Memo. 2022-15)

On March 2, 2022, the Tax Court issued a Memorandum Opinion in the case of Clary Hood Inc. v. Commissioner (T.C. Memo. 2022-15). The primary issue presented in Clary Hood Inc. was the amount the petitioner may deduct under IRC § 162(a)(1) as reasonable compensation paid to its chief executive

Read More »
Scott St. Amand May 24, 2022

Harwood v. Commissioner (T.C. Memo. 2022-8)

On February 15, 2022, the Tax Court issued a Memorandum Opinion in the case of Harwood v. Commissioner (T.C. Memo. 2022-8). The primary issue presented in Harwood was whether the taxpayer adequately substantiated his deductions for travel, residence, and “other” such deductions. Background to Harwood v. Commissioner During the years

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Scott St. Amand May 13, 2022

Elbasha v. Commissioner (T.C. Memo. 2022-1)

On January 12, 2022, the Tax Court issued a Memorandum Opinion in the case of Elbasha v. Commissioner (T.C. Memo. 2022-1). The primary issues presented in Elbasha were the petitioner’s filing status and whether and to what extent the petitioner can deduct Schedule C expenses. Background The petitioner, an emergency

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Scott St. Amand May 4, 2022

Skolnick v. Commissioner (T.C. Memo. 2021-139)

On December 16, 2021, the Tax Court issued a Memorandum Opinion in the case of Skolnick v. Commissioner (T.C. Memo. 2021-139). The primary issue presented in Skolnick was whether the petitioner’s “horse activity,” undertaken through his LLC, was an activity not engaged in for profit within the meaning of IRC

Read More »
Scott St. Amand April 25, 2022

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:

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Scott St. Amand April 24, 2022

Gaston v. Commissioner (T.C. Memo. 2021-107)

On September 2, 2021, the Tax Court issued a Memorandum Opinion in the case of Gaston v. Commissioner (T.C. Memo. 2021-107). The primary issue presented in Gaston was whether the petitioner engaged in acting as a trade or business in the tax years at issue and, if so, whether the

Read More »
Scott St. Amand October 6, 2021

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