Tax Court Omits Key Sentence In Ruling Against Taxpayer
The case involved the activity grouping rules of Code Section 469, the silver bullet of the Tax Reform Act of 1986, which was supposed to end all tax shelters forever. When it comes to the activity grouping rules, there are three types of tax practitioners: those who are, at most, vaguely aware of them; those who have studied them intently and remain somewhat bewildered; those who claim to understand them. The third group can be divided between people who have deluded themselves and liars.
Robert Redford’s New York Tax Trouble Provides Lessons For Planners
Most states follow federal principles pretty closely in computing state taxable income but note well the caveats in that statement. “Most states” and “pretty closely”. It probably came as a very unpleasant surprise that inserting an S corporation into the chain of tiered entities can make a big difference in New York state’s view of the transaction, but there you have it
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Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.