Tax Court

News & Analysis as of

Tax Court Affirms Use of Intergenerational Split-Dollar Arrangements

The Tax Court, in its decision earlier this month in Estate of Morrissette, examined intergenerational split-dollar arrangements between a mother's revocable trust and three irrevocable dynasty trusts, one established for...more

NJ Tax Court Denies Interest Addback Exception - Does Your Company Still Qualify?

In a decision published April 26, 2016, the New Jersey Tax Court in Kraft Foods Global Inc. v. Director, Div. of Taxation ruled that a taxpayer couldn’t deduct interest paid to its corporate parent. The taxpayer’s...more

Is Your Corporation “Zeroing Out” Income at End of Year Through Bonuses? Watch Out!

For the last few years the IRS has warned taxpayers that it would look closely at year-end bonuses that resulted in “zeroing out” taxable income of a corporation by deducting the bonuses as salary rather than a payment of...more

Estate of Clara M. Morrissette Secures Victory in Groundbreaking Estate Tax Case

In a case of first impression, the United States Tax Court ruled in favor of a taxpayer whose estate planning focused on the preservation and succession of a 70-year-old family-owned business. In Estate of Clara M....more

Tax Court Introduces Common Books of Authorities Project

The Tax Court has implemented a new common books of authorities program for its Toronto courtrooms that will eliminate the need for taxpayers to print copies of certain frequently-cited (and lengthy) authorities. The pilot...more

Parties Settle Closely Watched Tax Court Cases Involving Defined Value Clause

The IRS and executors have settled two cases in the United States Tax Court involving members of the Woelbing family, who own Carma Laboratories, Inc., of Franklin, Wisconsin, the maker of Carmex skin care products, and a...more

Your IRA is NOT a Bank. Borrowing From Your IRA May Have Serious Tax Consequences

The U.S. Tax Court issued a Decision in Thiessen v. Commissioner that may have effect on many small business owners who have used their IRA's for financing purposes. In Thiessen, the taxpayers were found to have engaged in a...more

Federal Tax Advisory: Mark to Market

In January 2016, the Sixth Circuit reversed the Tax Court and ruled for the taxpayer in Wright v. Commissioner, 809 F. 3d 877 (6th Cir. 2016). If the IRS agrees, the ruling means that foreign currency contracts that are...more

Appeals Procedures for Tax Court Cases

The Internal Revenue Service (Service) on March 23, 2016, issued Revenue Procedure 2016-22 which clarifies and describes the practices for the administrative appeals process in cases docketed in the United States Tax Court...more

New York State Clarifies Taxation of Unauthorized Insurance Companies

Three recent decisions (March 3, 2016) by a New York State Division of Tax Appeals administrative law judge help to clarify the taxation of unauthorized insurance companies subject to New York State taxation. New York...more

Wealth Management Update - March 2016

March Interest Rates for GRATs, Sales to Defective Grantor Trusts, Intra-Family Loans and Split Interest Charitable Trusts - The March § 7520 rate for use with estate planning techniques such as CRTs, CLTs, QPRTs and...more

Taxpayer Entitled to Capital Loss from Property Foreclosure for Year of Sale, Not When Proceeds Received

Evans v. Commissioner, T.C. Memo. 2016-7, was recently decided. The taxpayer in this case was an individual who worked full-time at a real estate development firm. The taxpayer also purchased residential real estate...more

Tax Court to Exempt Orgs: Substantiate!

While we’re not even three full months into 2016, the United States Tax Court already has decided two cases, which disallowed tax deductions for donors based on a tax exempt entity’s failure to properly substantiate those...more

German Cum/Ex-Trades: Enhanced Risks and Industry-Wide Challenges

The German and international financial industries and their advisors have come under new pressure to investigate so-called 'cum/ex' trades conducted between 2000 and 2012. For many years, tax authorities and criminal...more

Tax Court Holds Damages Not Attributable to Physical Injury

Section 104(a)(2) of the Internal Revenue Code provides an exclusion from gross income for damages received for physical personal injury or physical sickness. The statute further provides that emotional distress is not a...more

International Tax Advisory: No Love Lost Between Taxpayer Topsnik and the Tax Court

In late January, the Tax Court handed another loss to Gerd Topsnik (Topsnik v. Comm’r, Jan. 20, 2016). Topsnik last encountered the Tax Court in a 2014 case, in which he unsuccessfully argued that “informally” abandoning his...more

Indiana Tax Court Affirms Reclassification of Wooded Land from Excess Residential to Agricultural

On January 29, 2016, the Indiana Tax Court in DeKalb County Assessor v. Chavez upheld the decision by the Indiana Board of Tax Review to reclassify 2.72 acres of land from excess residential to agricultural for the March 1,...more

Wealth Management Update - February 2016

February Interest Rates for GRATs, Sales to Defective Grantor Trusts, Intra-Family Loans and Split Interest Charitable Trusts - The February § 7520 rate for use with estate planning techniques such as CRTs, CLTs, QPRTs...more

MoFo Tax Talk - Volume 8, No. 4

IRS PROVIDES RICS ALTERNATIVES TO ACCOUNT FOR FOREIGN TAX REFUNDS - Generally, when a U.S. taxpayer pays foreign tax, the U.S. taxpayer is entitled to take a credit (a “Foreign Tax Credit”) against the taxpayer’s U.S....more

Kruger: Appeal Allowed … Crown Awarded Costs

How should the Tax Court award costs where the taxpayer’s appeal was allowed but no changes were made to the assessment at issue? This unusual situation was considered by the Tax Court in Kruger Incorporated v. The...more

Tax Court Establishes Motion Days in Toronto

The Tax Court of Canada has established a pilot project for regular motion days in Toronto for the period of February to September 2016. The Court will review the initiative in September 2016. The project may be expanded to...more

Fourth Circuit Affirms Tax Court Decision Holding Partnership Allocation of State Tax Credits Was a Taxable Disguised Sale.

In its recently issued opinion in the case of Route 231, LLC v. Commissioner, No. 14-1983, 2016 WL 97598 (4th Cir. 2016), the U.S. Court of Appeals for the Fourth Circuit (the “Court”) affirmed the U.S. Tax Court’s decision...more

Real Estate Developers Pay Attention: Preserving Capital Gains Revisited by Tax Court

In Fargo v. Commissioner, TC Memo. 2015-96, the Tax Court reminded taxpayers and practitioners alike that a single sale can result in dealer treatment and, perhaps even more importantly, that: the taxpayer bears the burden of...more

Taxpayer Prevails in Family Limited Liability Company Case

In a recent taxpayer victory, the Tax Court found in favor of the taxpayer with respect to three hotly contested gift and estate planning issues involving family limited liability companies. The Tax Court decided the case of...more

New Jersey Tax Court Publishes Decisions That Dual Nexus Standards Are Inappropriate For Throwout

On January 6, 2016, the New Jersey Tax Court approved its January 14, 2014 decision in Lorillard Licensing Company LLC v. Director, Division of Taxation for publication, making the Tax Court decision precedential. The...more

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