Eversheds Sutherland 11th Circuit Business Blog
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Forfeited Deposit Not Capital Gain in Real Estate Deal

In a case of first impression, the Eleventh Circuit affirmed that a taxpayer could not treat as long-term capital gain its retention of a nonrefundable deposit after a would-be buyer defaulted on an agreement to purchase real property used in the taxpayer’s trade or business. CRI-Leslie, LLC v. Comm’r, 882 F.3d 1026 (11th Cir. 2018). Under the facts of the case, the taxpayer,...

YOU CAN’T HAVE YOUR CAKE AND EAT IT TOO: “MIDCO” TRANSACTION EXPOSES SELLERS TO TRANSFEREE LIABILITY

Consider the following situation: You’re a major stockholder in a corporation whose assets have appreciated in value, and you want to sell.  You would really like to structure the deal as a sale of stock in order to avoid capital gains tax on the corporation’s appreciated assets.  When you contact potential buyers, you find that they all want to structure the purchase as an asset sale...

“This is a tax case. Fear not, keep reading.”

These are the opening words of Judge Kevin Newsom’s opinion for the court in Morrissey v. United States, 2017 WL 4229063 (11th Cir. Sept. 25, 2017).  What interested the court in the case were two issues:  whether the expenses that a gay man incurred to father children through in vitro fertilization are deductible medical expenses under section 213 of the Internal Revenue Code; and, if...

The Eleventh Circuit Delves into the “Murky” Waters Surrounding the U.S. Virgin Islands

For many years, the IRS has been aggressively auditing taxpayers who have filed income tax returns with the U.S. Virgin Islands (USVI) Bureau of Internal Revenue (VIBIR), claiming a 90% tax credit under the USVI Economic Development Program (EDP).  The IRS has long believed that individuals are falsely claiming to be “bona fide” USVI residents to obtain the tax credit, and the IRS...