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Can Walgreen Stance On Property Tax Hurt Income Tax Position Of 1031 Investors?
Why does this scare me? Well, if I was what I refer to as the agent from hell and I was auditing somebody who had exchanged into the $4,325,000 Oshkosh Walgreen, I would be inclined to say. “You know. It looks to me like your exchange facilitator only put about $1.7 million or so into real estate as it is defined under state law in Wisconsin. The balance went into a contractual right, which is property not of like kind, making it taxable boot.” Yuck.
If my fear is justified, things would not be good for the sub sub industry that has relied on the pools of 1031 money. At least one prominent expert, Charles Egerton who is a past chair of the ABA’s Section of Taxation, thinks that my fears may be groundless. I do have to say though that it troubles me that people are saying that a property is worth one thing when they go to the capital markets and determine whether something qualifies for income tax deferral and something less, a lot less, when it comes to how much they have to chip in for the cops and the fire fighters and the school kiddies, but that’s just me, who might have been the agent from hell, if he hadn’t had the good luck to be hired by Herb Cohan.
America’s Hitler
My friend Tom Cahill has given me permission to republish his letters home from his voluntary exile in France. This is the fourth in the series. It will be daily...
Dressage Riding Physician Convinces IRS On Hobby Loss Audit But Loses To Massachusetts
here is little indication in the record that the appellant made any serious effort to develop expertise in the economics of training, leasing and selling horses as a business. The appellant argued that her consultations with various professionals demonstrated that she availed herself of the expertise of others in carrying on her activity. The Board found, however, that the lack of record keeping and lack of payment for these “consultations” was not indicative of a bona fide business relationship. In addition, her consultations with accountants were limited to the preparation of tax returns.
Similarly, the appellant failed to present evidence tending to distinguish her consultations with Wadsworth Farm’s owner and head trainer regarding the purchase and sale of her horses from those of an ordinary high-level amateur rider. Ms. O’Connell testified that she did not assist with the preparation of Dr. Thayer’s profit projections. While Ms. O’Connell and Dr. Thayer consulted often about matters of the horses’ training and wellbeing, Ms. O’Connell did not give any testimony that she advised the appellant with respect to the business of profitably training and selling horses.
Report On IRS Targeting Of Conservatives – No Christmas Pony For Darrell Issa
The other implication of the report is that the IRS should simply have ignored allegations that 501(c)(4) groups were breaking the law and not have investigated at all. If you are willing to acknowledge that there might have been a law being broken or an envelope being pushed past the breaking point, the notion that you had one bureaucrat who became zealous about the matter is hardly surprising. In the end, she accomplished little other than slowing down some applications as each approach she brain-stormed proved unworkable. The report is highly critical of senior leadership for not more quickly unsnarling the problem once they became aware of it, but anybody who has worked with the IRS knows that once anything gets snarled, it will take a while to unsnarl it.
So I recommend that if you are interested in the matter you read the report with an open mind. Even though it strongly adopts one narrative, all the material for a different narrative is there. That is why the New York Times can headline its coverage “Probe Fails to Link IRS Scandal to White House” while Ben Shapiro’s Truth Revolt headlines “Issa Releases Damning Report On IRS Scandal” and leads with “Issa’s report contained emails which seemed to indicate there was visceral hatred of the Tea Party by IRS workers.” Frankly, even if I just strongly disliked someone, I could come up with something better than calling them “icky”.
If Only Obama Had Taped Conversations
The just before Christmas report of Darrell Issa's Committee on Oversight and Government Reform is probably a big disappointment to promoters of the IRS scandal...
You Need Partners To Have A Partnership
Originally published on forbes.com. Estate of Lois L. Lockett, et al. v. Commissioner, TC Memo 2012-123 One of the most fundamental principles of partnerships is that...
United States v. Hansen & Hovind
I have been following the Kent Hovind tax drama for over two years, but my friend and most constant commenter Bob Baty keeps much more on top of it. Kent is nearing...
Tom Cahill Forgives The FBI
My friend Tom Cahill has given me permission to republish his letters home from his voluntary exile in France. This is the first in the series. It will be daily until...
Phantom Mares And Real Trucks Don’t Make For A Winning Horse Loss Tax Case
Still, if the notion of the horse business being part of the dealership business had been better executed, it might have worked. An approach that occurred to me would have been to have the operation, but not the real estate, inside a single member LLC that was owned by one of the dealerships. With that approach rather than a big nasty negative number on a Schedule F, the transactions would have just made the positive number from one of the S corporations somewhat lower. Frankly, this borders on audit lottery advice, but it is really the filing position that is consistent with the unified business argument.
My exposure to dealership accounting is somewhat limited. At Joseph B Cohan and associates in the 1980s, my buddy Mikey handled the dealerships and I had the low income housing tax shelters, but I picked up a bit here and there. That makes me think that there might be practical issues that would foreclose running the horse business through the dealership books, since “the factory” can have specific requirements about how the dealership keeps it books. Still, it might have been worth looking at
Is IRS Ninth Circuit Salus Mundi Win A Pyrrhic Victory?
So the interesting question is what will happen if transferee liability is found against Salus Mundi. There may be some theory that could be used to attack the estate of Professor Diebold for handing out all the Foundations resources while the sword of Damocles was over its head. Something tells me that the IRS will not be able to chase the recipients of the Foundation’s largess. You never know, though. If in a couple of years the IRS auction notices include a large pile of Indo-European scholarly works, you’ll know what happened.