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What’s It Worth To Say Your Wine is From Long Island ?
We have concerns about how a taxpayer would value the right to use an AVA designation. It is unclear whether the value of the right to use an AVA designation attaches to an acquisition of a particular vineyard within an AVA. The benefit in value from the right to use an AVA designation accrues to all land whose highest and best use is as a vineyard within such designated viticultural area. Consequently, all of the closest comparable vineyards share the same intangible benefit thereby making an appraiser’s determination of the increment of value assigned to the intangible benefit and finding comparable vineyards outside of the particular AVA factually difficult.
Chief Counsel Reiterates Dependency Option for Same Sex Couples
In order for someone to be your dependent you must meet three tests – relationship, support and gross income. One of the possible relationships is “member of your household” (with the quaint caveat that the household composition not violate local law). So if Robin provides more than 1/2 of Terry’s support and Terry’s gross income is below the threshold (currently $3,650) Terry can be Robin’s dependent. This will qualify Robin for the more favorable head of household rates and exempt from payroll and withholding the health benefits that Robin’s employer provides to Terry.
You Should Wear Shoes in Tax Court But Don’t Bring the Box
This was originally published on October 27th, 2010. Thomas F. Hale v. Commissioner, TC Memo 2010-229 Over 500 years ago Fra Luca Bartolomeo de Pacioli published a...
FLP Good for the Family Business – But Maybe not the Family Jewels
The Eighth Circuit affirmed the Tax Court’s conclusion that the restrictions upon the children did not serve a bona fide business purpose because the partnership was not a ““business,” active or otherwise.” Id. at 770. In so holding, the Holman court distinguished a line of cases where active, ongoing business interests were preserved by the transfer restrictions at issue.S
Wag The Dog
In the end, the capital gains tax had to be paid and apparently a 40% gross valuation overstatement penalty. Not to mention all the fees which were estimated to be around 20% of the “tax savings”. The really interesting question, though, is how much was lost due to stock being sold at less favorable prices than might have been obtained without the complications of the shelter planning?
Bring A Gun To School But You Better Have Insurance
This was originally published on October 20th, 2010 on PAOO. THOMAS MORE LAW CENTER v. OBAMA, God made the angels to show Him splendor, as He made animals...
Debit by the Window – Credit out the Window
Mr. Krause was a tax attorney and CPA who built his own Son of BOSS shelter. I have to wonder if he has two sides to his personality. Right now the CPA side is yelling “Language of 752, language of 752 – I knew it couldn’t work. The entry didn’t balance. You can’t get all that basis without crediting something.” The tax attorney side has answers. I can show you an example of a CPA making beautifully balanced entries that make no impression on judges, who are lawyers.
Welcome to the Sausage Factory – RTFI
Because Fidelity High Tech did not use cash cost to compute the stepped-up basis, it was required to attach an explanation to Schedule D. No such explanation was attached. An adequate explanation, as required by the instructions, would have included disclosure of the underlying transaction that resulted in the purported stepped-up tax basis used by Fidelity High Tech.
It’s Over
When this case was announced in the media earlier this year there was some vilification of Mr. Egan, which I really think was misplaced. Mr. Egan was part of the team of people that helped put men on the moon. His team of advisers believed that there were geniuses in the national firms that had figured out a legitimate capital gain strategy. In retrospect, it is easy to say that they should have realized the game was up when KPMG told them they had to disclose.
Sauce for the Goose
The court did not bother to remand the case back to appeals given the amount of time that had passed. The IRS behaviour in this case is rather disturbing. My bet would be that Dr. Byk did in fact file his second quarter 941 near the dawn of the millennium. Either way the IRS looks really lame, though, not being able to explain the codes on documents that they introduce as evidence. On the other hand it is heartening to know that the tax court is there for us in this situation.