Substance over Form: No Friend of the Taxpayer

In the recent Messina case, the Ninth Circuit Court of Appeals affirmed the decision of the Tax Court denying S corporation shareholders losses as a result of lack of basis, particularly in this case, debt basis. In rendering their opinions, the Ninth Circuit and Tax Court discussed a taxpayer’s ability to argue substance over form…
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MCM Investment Management LLC – Related Parties and a Worthless Interest Deduction

In a recent taxpayer-favorable case, the Tax Court upheld a loss deduction for a worthless investment under Code Section 165. At issue was an interest held by a partnership in a related family-owned real estate development business. The taxpayer, MCM Investment Management LLC (“MCM”) alleged its interest in McMillin Companies, LLC (“InvestCo”), a real estate…
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The Secure Act: Changes to the RMD Rules of Inherited Retirement Accounts

On December 20, 2019, President Donald Trump signed the Setting Every Community Up for Retirement (Secure) Act into law as part of the year-end spending bill. The Secure Act (the “Act”) goes into effect on January 1, 2020 and makes a host of changes to retirement plan laws. Among these changes are significant changes to…
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Are Your Life Insurance Death Benefits Taxable?

The income taxation of life insurance death benefits seems fairly simple initially. Many people know the general rule that death benefits are not subject to income tax. However, there are exceptions that can apply which will cause the beneficiary to owe income tax on the receipt of death benefits. This article describes certain of these…
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Democratic Presidential Candidates: Tax Plans

As the race for the Democratic nomination for President heats up and the first primary election taking place in just 3 months, candidates have begun to release more details about their proposed tax plans.  While these proposed plans will undoubtedly evolve and change over time and are of course subject to being passed by Congress,…
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The Tax Consequences of Family Business Transactions

Parents are often in a position to help their children take advantage of business opportunities. A parent’s connections, business knowledge, expertise, and other intangibles acquired over may years of work can be used to benefit a child starting a career or business. Likewise, a parent may advance funds to a child to start or acquire…
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IRS Leaves $155.5 Million Lump of Coal for Faulty Easement Deed

On October 28, 2019, the Tax Court released its opinion in Coal Property Holdings, LLC v. Comm’r, 153 T.C. No. 7 (2019). This case comes at a sensitive time of year where deadlines are looming in order to file conservation deeds to qualify for the deduction under Section 170(h), relating to qualified conservation contributions, for…
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All about that basis, about that basis, no gains

The Tax Cut and Jobs Act (“TCJA”) enacted some sweeping changes to our nation’s tax laws. One major change was the modification of Section 2010 to increase in the individual estate tax exemption from $5M, indexed for inflation ($5.49M in 2017), to $10M, indexed for inflation ($11.2M in 2018, 11.4M in 2019). Thus couples went…
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