Annotations 12/2009

(inverse condemnation case challenging the constitutionality of Act 73 on the basis that the Act took oceanfront owners' rights to claim accreted land and declared all such lands to be "state land" and damaged oceanfront owners' remaining property by depriving them of ownership of land abutting the ocean; court vacated part of circuit court's order granting plaintiffs' motion for partial summary judgment which concluded that the Act effected an uncompensated taking of and injury to littoral owners' right to ownership of future accreted land; case remanded to circuit court).

(IRS has no discretionary authority to waive the recapture provision applicable to the 2008 version of the first-time homebuyer credit).

(landfill gas, in order to qualify for the I.R.C. Sec. 45 credit, must be energy-production grade, and taxpayer must have an ownership interest in the equipment producing the fuel that qualifies for the credit). 

(defendant need not pay plaintiff employees for time spend donning and donning protective gear; donning and doffing protective gear constitutes "changing clothes" under FLSA and is excludible from compensable time according to union-negotiated employment agreement).

(flow-through loss from tier one is a partnership item of tier one that can only be disallowed by issuing an FPAA to tier one; Section 469 is an affected item with both partnership level components).

(individual that inherited partial interest in residence is not eligible for first-time homebuyer credit, even if the individual purchases the remaining interests from the taxpayer's siblings; no rationale provided as to how siblings are related parties under the statute). 

(taxpayers, married couple, does not qualify for first-time homebuyer credit or long term homeowner credit because one spouse owned prior home in prohibited timeframe (resulting in denial of first-time homebuyer credit), and other spouse did not own the prior home (which bars long-term homeowner credit). 

(case involves dispute over contract for purchase of popcorn which contained unacceptable levels of Alflatoxin upon inspection at delivery for which defendant paid rate at less than contract rate and used as livestock feed; question involved whether rejection for non-conforming goods was proper and whether defendant properly revoked acceptance of non-conforming popcorn; summary judgment for plaintiff denied due to factual issues remaining and summary judgment for defendant denied on defendant's claim that plaintiff used unapproved chemicals while growing the popcorn because factual issues remained). 

(winterizing services of plumbers and/or landscapers for pipes in buildings qualify as "plumbing" and are subject to sales tax; but, winterizing outside pipes is not taxable).

(for taxpayer that places a small wind energy system in service, if the credit (2.1 cents/KwH of electricity produced) exceeds the taxpayer's tax liability, taxpayer may choose to take an energy investment tax credit (30 percent of the cost of the wind system) as an alternative - unused credits may be carried back one year and forward 20 years; there is no specifically required documentation needed to show that a wind energy system was placed in service during the tax year; tax credit not claimable for electricity that taxpayer uses in the taxpayer's business, but energy investment credit may be claimed on property that produces electricity for taxpayer's business; third incentive exists under ARRA 2009 for wind energy systems - taxpayer may apply for and receive a cash payment for 30 percent of the cost of a qualifying wind energy system; Form 3800 must be attached to return and Form 8835 may need to be included and to receive energy investment tax credit Form 3468 may need to be included with return).

(taxpayer, a licensed public warehouse, must capitalize and allocate to ending physical grain inventory in accordance with I.R.C. Sec. 263A the direct costs of acquiring grain for resale and the properly allocable share of indirect costs that directly benefit or are incurred in the resale of the grain).   

(decedent's will did not revoke decedent's revocable trust, and quitclaim deed that decedent issued before death as trustee of trust conveying family farm and unrelated mineral interests not effective to transfer the farm out of the trust; trust did not provide for revocation by will and decedent, as trustee of trust and sole lifetime beneficiary of trust cannot transfer the trust estate to third person free of trust).

(plaintiff not entitled to specific performance of contract under which defendant agreed to sell defendant's farm for $150,000; plaintiff only able to obtain prequalification commitment from mortgage company for $120,000, and commitment letter did not guarantee funds would be available to pay full purchase price; plaintiff failed to show that family members could provide financial assistance).

(breach of contract case; evidence sufficient to support jury's award of damages to plaintiff). 

(application for conditional use permit to more than double size of feedlot in area zoned agricultural approved - county board's denial not supported by record).

(plaintiff farmers who received state license to grow industrial hemp, but didn't get approval from defendant, sued to acquire such permission; court dismissed case - under federal law, trace amounts of industrial hemp are controlled substances and remedy lies with the Congress changing existing law to distinguish industrial hemp from marijuana).

(defendant's grant of easement to plaintiff restricted use of defendant's land to agricultural purposes but did allow defendant to obtain release of certain part of eased land for construction of home for defendant's use; but, subsequent transfer of any released acreage transfers subject to agricultural use restriction - construction of home restricted to defendant or defendant's child).

(case involves multiple claims against defendant arising from discharge of wastewater containing organic matter from defendant's fruit-processing plant; claim of negligence per se as violation of SDWA dismissed; some alleged violations of CERCLA RCRA and/or Michigan NREPA not dismissed; other claims alleging violations of SDWA dismissed; claim seeking costs attributable to alleged violation of CERCLA, RCRA and/or Michigan NREPA not dismissed).

(defendant (veterinarian) not liable for damages to plaintiff for plaintiff's emotional distress from death of plaintiff's pet bird - a scarlet macaw; trial court determined that defendant 30 percent at fault and awarded no damages; appellate court agreed, noting that state law classifies animals as personal property and limits damages for their negligent injury or death to fair market value). 

(affirmance of Tax Court decision; discharge of credit card debt constituted discharge of indebtedness income and not a purchase price adjustment; I.R.C. Sec. 108(e)(5) applies only to direct agreements between purchaser and seller).

(case involves unmarried parents with joint custody of son and court holds that mother is custodial parent for tax purposes due to having physical custody of son for greater part of year even though son spent more waking hours with the father).

(debtors demonstrated establishment of homestead and had intent to return to the homestead; trustee failed to carry burden to show that debtors had permanently left the homestead and that they did not intend to return to it; court overruled trustee's objection to confirmation, trustee's objection to exemption of the homestead and motion to dismiss).

(amount of gift tax paid by recipients of deemed gifts of remainder interest in QTIP is included in decedent's gross estate via I.R.C. Sec. 2035(b); I.R.C. Sec. 2207A does not shift gift tax liability to QTIP recipients).

(IRS held to have abused its discretion when it proceeded with levy to collect taxpayer's unpaid tax; taxpayer established that levy would create economic hardship - taxpayer couldn't find employment due to terminal illness; while taxpayer not current in filing tax returns, Tax Court could not find any cases in which requirement that taxpayer be current with filing returns be applied to taxpayers that meet economic hardship criteria).

(statutory amendment does not make dog owners strictly liable for any and all damages caused by dogs; amendment only expands scope of statutory coverage to internal injuries and does not address playful and mischievous acts of dogs that cause injury).

(IRS reveals that it currently has 244 taxpayer under audit on the issue of donated conservation easements, 84 of which are in Colorado).

(expenses incurred for in vitro fertilization procedure not deductible medical expenses; expenses not related to treatment of medical condition). 

(defendant issued zoning permit for installation of aerogenerator and plaintiff filed a land use appeal; court upheld trial court’s denial of appeal – court rejected plaintiff’s argument that public approval required before approval of zoning permit; aerogenerator was accessory use rather than a conditional use or special exception and was subordinate to principal use of the land as residential property and, as such, was similar to solar panels).

(plaintiffs were poultry growers that sued defendant for breach of contract and PSA violations and various state law claims; arbitration required under poultry grower contracts at issue in case – arbitration clauses were not unconscionable and were not fraudulently procured).

(thirteen writings that purportedly left certain items of decedent's property to specific individuals, but were not in testator's handwriting and had no self-proving affidavit not admissible to probate; executor failed to meet burden of proof that writings were codicils to decedent's will - use of word "for" insufficient to constitute word of grant or devise). 

(question of fact raised as to whether defendant's seizure of plaintiff's pets was criminal action).  

(petitioner, a partnership, can claim a charitable deduction for donation of land to state turnpike commission; land worth more than amount received and donative intent present; but, petitioner must make a pro rata apportionment of adjusted basis in land to the portion of transfer deemed to be a sale). 

(purpose of PSA is to protect competition; thus, only those practices that will likely affect competition adversely violate the PSA; fact that another grower given contract on favorable terms not violative of PSA unless plaintiff establishes that competition adversely impacted).

(breach of contract case involving groundwater and soil testing; on motion for summary judgment, court ruled that issues of fact remain to be resolved at trial). 

(sole owner of LLC personally liable for LLC's employment taxes; no election made to treat LLC as corporation and court noted that check-the-box regulations have previously been upheld as valid citing Medical Practice Solutions case). 

(stock transferred to FLP not included in decedent's estate under I.R.C. Sec. 2036(c); bona fide sale present). 

(securities trader did not make proper mark-to-market election under I.R.C. Sec. 475(f); election made after-the-fact more than one year late; substantial compliance argument rejected). 

(petitioners (married couple) had income from indirect life insurance distributions; application of cash value against policy designed to eliminate one spouse's loan against policy value was not discharge of debt). 

(debtor's patent infringement (saving patented soybean seeds) debt excepted from discharge under 11 U.S.C. Sec. 523(a)(6)). 

(plaintiff, raisin grower, is a "handler" who "acquired" raisins and is, thus, subject to Ag Marketing Agreement Act of 1937 and the order regulating the "Handling of Raisins Produced from Raising Variety Grapes Grown in California"; penalties imposed by judicial officer did not violate the Excessive Fines Clause of the Eighth Amendment; Marketing Order's reserve requirement does not violate Due Process Clause of Fifth Amendment as a physical taking of plaintiff's private property without just compensation; judicial officer's decision to dismiss plaintiff's administrative petition not arbitrary, capricious, abuse of discretion or contrary to law; summary judgment granted to defendant). 

("willful," as contained in the Kansas Consumer Protection Act, includes intent to harm the consumer; case involved tainted cattle feed). 

(petitioner may claim casualty loss deduction for damage to vehicle incurred in traffic accident while driving under the influence of alcohol (loss claim filed with insurance company denied because blood alcohol level at time of accident over legal limit) negligence not bar to casualty loss deduction; no determination made as to whether accident caused by alcohol or weather conditions; penalties not imposed). 

(landowner failed to meet burden of proof concerning value of condemned land). 

(on various motions for summary judgment, court holds that Plant Protection Act and regulations thereunder do not allow for low level adventitious presence of regulated genetically modified rice in the commercial rice supply; North Carolina Unfair Trade Practices Act does not provide cause of action to plaintiffs that have no operations in the state; economic loss doctrine not applicable to plaintiffs' claims because claim does not involve any loss to property that was subject of a contract and property not alleged to be defective; no public nuisance for defendant's (Bayer) contamination of rice supply, but genuine dispute remains concerning whether defendant's use of its cooperators' land interfered with the plaintiffs' use of their land in terms of the type of rice that could be planted on the plaintiffs' land; no negligence per se based on APHIS regulations or state law; no affirmative defense of intervening cause - Bayer had duty to introduce GMO rice without contaminating non-GMO rice; damages to share-rent landlords also to be issue at trial; issue of punitive damages matter for trial; trial scheduled for January 2010). 

(IRS recommends treating cooperative associations as C corporations for purposes of small partnership exception of I.R.C. Sec. 6231(a)(1)(B)).

(IRS recommends treating cooperative associations as C corporations for purposes of small partnership exception of I.R.C. Sec. 6231(a)(1)(B)).

(taxpayer's corn-based ethanol production plants qualify for I.R.C. Sec. 179C(a) election to expense 50 percent of cost basis of new plant property; ethyl alcohol vapor produced from corn at taxpayer's plants during dry mill process constitute gas produced from biomass). 

(trial court improperly set aside decedent's 2002 will devising 88-acre farm; decedent had testamentary capacity based on evidence presented; evidence insufficient to support finding of undue influence - no abuse of confidential relationship). 

(plaintiff claims that defendant (feedlot and farm) created nuisance by grinding hay in violation of county-issued conditional-use permit and that county's failure to enforce conditional-use permit constituted a taking; inverse condemnation claim fails as a matter of law because government did not physically conduct activity on plaintiff's property or regulate their property; no evidence existed that defendant in violation of conditional use permit; appropriate remedy would be mandamus action against county for failure to enforce conditional use permit and/or private nuisance action against defendant). 

(plaintiff fed their alpacas feed that they purchased from defendant that was contaminated at defendant’s plant resulting in death of several of plaintiff’s alpacas; compensatory damages awarded, but lower court declined to submit issue of punitive damages to jury; appellate court held that malice could be shown – defendant’s employees knew of and disregarded contamination risk; plaintiff need not prove that defendant knew that feed was contaminated and intended to mislead plaintiff; thus, jury should have been instructed on damage mitigation issue).