In Evans v Comm’r, the Tax Court disallows an ordinary loss from a foreclosure sale
The Tax Court released a few days ago Evans v Comm’r, T.C. Memo. 2016-7. This case offers a continued illustration of the perils of “facts and circumstances” Tax Court litigation. “Facts and circumstances” is a term of art in tax law that pops its head in almost every other page of the Internal Revenue Code. One of the few most topical for the investment industry instances of “facts and circumstances” include the “trader v. investor” issue, the “trade or business” issue, and last but not least the “dealer v....
January 13, 2016 read more
Real Estate Investor Argument - Continuing Travails in Allen v U.S.
When it rains, it pours. Just a few weeks after the Tax Court’s decision in Boree, the US District Court for the Northern District of California held against the taxpayer in Allen et al. v. United States, No. 3:13-cv-02501 (May 28, 2014). In a much familiar fact pattern the taxpayer acquired real estate, tried to develop it and sold it down the road. He claimed capital gains but the IRS and the District Court disagreed. As with many other cases that end all the way up in court, the taxpayer struggled with evidence regarding material issues. Also, as with many other small cases (in this...
May 30, 2014 read more
Boree v. Comr: Tax Planning Left on the Back Burner, Sometimes it Comes to Bite You
I see this over and over. The reality is that to business people, particularly in M&A, tax is an afterthought. This is more so true for smaller investment funds and investors. Larger entities with more extensive experience, while dreading dealing with tax, at least know what’s at stake. In ordinary income v. capital gain differential situation with penalty exposure, a mishap easily would bite over 20-30% into your profitability. That’s a large percentage! This is what Mr. Boree is learning from experience right now. I am talking about the newest real estate case of Boree v. Comr....
May 15, 2014 read more