Income Tax Issues
Books and Records

Avoiding the Net Investment Income Tax with Significant Participation

Uncle Bill’s Net Investment Income Tax Quandary Suffice it to say that Uncle Bill had a good year in 2021. As you may remember from this article, Bill and Ethel’s daughter Moon (neé Jaime) was one of the initial investors in a small online book retailer based out of Seattle that was founded by her friend Jeff. When the website took off, Moon made a pretty penny (or 304 billion pretty pennies). Bill invested a

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Scott St. Amand March 29, 2022
Income Tax Issues
Deductions

Sharma v. Commissioner
T.C. Memo. 2020-147

On October 29, 2020, the Tax Court issued a Memorandum Opinion in the case of Sharma v. Commissioner (T.C. Memo. 2020-147). The primary issue before the court in Sharma v. Commissioner was what portion of the petitioners’ loss deduction from rental real estate activities claimed on Schedule E (Supplemental Income and Loss), is disallowed under the IRC § 469(a) and (i) limitations on the deductibility of passive activity losses.

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Scott St. Amand October 29, 2020
Business Related Issues
Books and Records

Lucero v. Commissioner
T.C. Memo. 2020-136

On September 29, 2020, the Tax Court issued a Memorandum Opinion in the case of Lucero v. Commissioner (T.C. Memo. 2020-136). The issue before the court in Lucero v. Commissioner was whether the petitioners’ real estate loss deductions were disallowed by IRC § 469 and/or IRC § 280A. Background to Lucero v. Commissioner The petitioner-husband owned a short-term rental property in The Sea Ranch, California. To be clear, the property was not in Sea Ranch,

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Scott St. Amand September 29, 2020
Business Related Issues
Economic Substance Doctrine

Daichman v. Commissioner
T.C. Memo. 2020-126

On August 31, 2020, the Tax Court issued a Memorandum Opinion in the case of Daichman v. Commissioner (T.C. Memo. 2020-126). The primary issue before the court in Daichman v. Commissioner was whether the petitioners are entitled to a short-term capital loss deduction of $2.1 million in connection with the dissolution of their S corporation or whether their tax transactions lacked economic substance. Brief Background to the Shenanigans in Daichman v. Commissioner During 2009 the

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Scott St. Amand August 31, 2020
Business Related Issues
Burden of Proof

Sellers v. Commissioner (T.C. Memo. 2020-84)

On June 15, 2020, the Tax Court issued a Memorandum Opinion in the case of Sellers v. Commissioner (T.C. Memo. 2020-84). The primary issue before the court in Sellers v. Commissioner was whether the petitioner provided sufficient evidence to substantiate his bases in certain companies and his material participation (for passive activity loss purposes). This case also presents a very interesting question of whether the burden of proof really shifts to the IRS to prove

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Scott St. Amand June 15, 2020
Income Tax Issues
Burden of Proof

Hakkak v. Commissioner
T.C. Memo. 2020-46

On April 13, 2020, the Tax Court issued a Memorandum Opinion in the case of Hakkak v. Commissioner (T.C. Memo. 2020-45). The issue properly before the court in Hakkak v. Commissioner was whether petitioners are entitled to treat as nonpassive certain rental real estate losses they previously treated as passive under IRC § 469 on their Schedules E (Supplemental Income and Loss) for the years at issue. The 2011 and 2012 Returns in Hakkak v.

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Scott St. Amand April 13, 2020
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Sharma v. Commissioner
T.C. Memo. 2020-147

On October 29, 2020, the Tax Court issued a Memorandum Opinion in the case of Sharma v. Commissioner (T.C. Memo. 2020-147). The primary issue before the court in Sharma v. Commissioner was what portion of the petitioners’ loss deduction from rental real estate activities claimed on Schedule E (Supplemental Income

Read More »
Scott St. Amand October 29, 2020

Lucero v. Commissioner
T.C. Memo. 2020-136

On September 29, 2020, the Tax Court issued a Memorandum Opinion in the case of Lucero v. Commissioner (T.C. Memo. 2020-136). The issue before the court in Lucero v. Commissioner was whether the petitioners’ real estate loss deductions were disallowed by IRC § 469 and/or IRC § 280A. Background to

Read More »
Scott St. Amand September 29, 2020

Daichman v. Commissioner
T.C. Memo. 2020-126

On August 31, 2020, the Tax Court issued a Memorandum Opinion in the case of Daichman v. Commissioner (T.C. Memo. 2020-126). The primary issue before the court in Daichman v. Commissioner was whether the petitioners are entitled to a short-term capital loss deduction of $2.1 million in connection with the

Read More »
Scott St. Amand August 31, 2020

Sellers v. Commissioner (T.C. Memo. 2020-84)

On June 15, 2020, the Tax Court issued a Memorandum Opinion in the case of Sellers v. Commissioner (T.C. Memo. 2020-84). The primary issue before the court in Sellers v. Commissioner was whether the petitioner provided sufficient evidence to substantiate his bases in certain companies and his material participation (for

Read More »
Scott St. Amand June 15, 2020

Hakkak v. Commissioner
T.C. Memo. 2020-46

On April 13, 2020, the Tax Court issued a Memorandum Opinion in the case of Hakkak v. Commissioner (T.C. Memo. 2020-45). The issue properly before the court in Hakkak v. Commissioner was whether petitioners are entitled to treat as nonpassive certain rental real estate losses they previously treated as passive

Read More »
Scott St. Amand April 13, 2020