Overview In Leyh v. Commissioner[1], the Tax Court held that the taxpayer’s time incurred while traveling from her home to rental properties to perform a variety of tasks with respect to 12 rental activities counted towards the test of whether the taxpayer was a real estate professional.[2] As a result, the taxpayer was considered a…
Overview The Tax Court determined that the extinguishment of the taxpayer’s debt took place in a closed tax year, even though FEMA issued a 1099-C[1] in an open tax year. As a result, the Tax Court held that the IRS was barred by the statute of limitations from assessing the taxpayer for the federal income…
Is it possible to begin depreciating a building before the building opens its doors to customers? Although it seems unintuitive, the answer is yes. In the case of Stine LLC v. USA[1], a Louisiana federal district court held that the taxpayer’s retail building had been “placed in service” despite the fact that the retail stores…
Takeaway from Van Malssen v. Commissioner: In Van Malssen v. Commissioner, the Tax Court concluded that, for purposes of section 280A, travel days will only escape classification as personal use days if the principal purpose of the trip as a whole is to perform repairs and maintenance.[1] Overview of Facts in Van Malssen The taxpayers purchased a…
On Friday October 10, 2014, the U.S. Court of Appeals for the 8th Circuit overturned the Tax Court’s decision in Morehouse v. Commissioner and held, in a two-to-one decision, that CRP payments made to non-farmers constitute rentals from real estate for purposes of § 1402(a)(1) and are excluded from the self-employment tax (“SECA”).[1] What is…
