Eleventh Circuit Avoids Controversial Interpretative Question on S Corporation Taxation
Posted on May 9, 2019 in Taxation | Comments Off on Eleventh Circuit Avoids Controversial Interpretative Question on S Corporation Taxation
In Meruelo v. Commissioner, 2019 WL 1986618 (11th Cir. May 6, 2019), the Eleventh Circuit was tasked with reviewing a controversial Tax Court decision regarding the basis created by a subchapter S corporation’s indebtedness to its shareholders. Meruelo v. Commissioner, T.C. Memo. 2018-16. In Judge William Pryor’s opinion, the court determined the case on its facts, never addressing the...
Reinvestment of Tax Shelter Proceeds Is Not a Valid “Business Purpose”
Posted on Dec 13, 2018 in Taxation | Comments Off on Reinvestment of Tax Shelter Proceeds Is Not a Valid “Business Purpose”
The Eleventh Circuit last week decided a tax case exploring the appropriate scope of factual review for the economic substance and business purpose doctrines. Curtis Investment Co. v. Commissioner, 2018 WL 6380325 (11th Cir. Dec. 6, 2018). These two doctrines allow courts and the IRS to make a substance-over-form review of suspected tax avoidance activities. In order to claim a tax...
Forfeited Deposit Not Capital Gain in Real Estate Deal
Posted on Mar 15, 2018 in Taxation | Comments Off on 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
Posted on Oct 6, 2017 in Taxation | Comments Off on 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.”
Posted on Oct 2, 2017 in Taxation | Comments Off on “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
Posted on Aug 26, 2016 in Taxation | Comments Off on 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...