Case Summaries 11/2010
(taxpayers (married couple) cannot take charitable deduction for house donated to local volunteer fire department because taxpayers could not prove that the value of their house exceeded the benefit they received from the burn-down and demolition; taxpayer's initially claimed $76,000 as charitable donation, but later amended return to claim replacement value of home as deduction ($235,350)).
(plaintiff cannot foreclose federal tax liens on property taxpayer owns jointly with spouse because foreclosing lien would satisfy only portion of tax debt and public policy of state is against foreclosure on marital home where doing so would punish one spouse for wrongdoing of other spouse).
(I.R.C. Sec. 104(a)(2) excludes from gross income compensatory damages for physical injuries and physical sickness (including damages received for economic losses resulting from the physical injury or physical sickness) that an individual receives from a state for wrongful conviction and incarceration).
(defendant's eight-foot high fence surrounding plaintiff's property not a nuisance; case remanded on plaintiff's boundary and access claims).
(trustee's motion to abandon farm owned by debtors denied; case originally filed as Chapter 12, but voluntarily converted to Chapter 7; after receiving discharge, debtors refinanced debt on farm and made substantial improvements without telling trustee or court of such events; creditor objected to trustee's motion to abandon farm and court denied motion; farm was property of bankruptcy estate and all appreciation in farm's value that occurred post-petition belonged to estate and was available to pay creditors; equity appeared to be present in farm that exceeded homestead exemption that debtors claimed; trustee directed to determine value of farm and consider impact of avoiding debtors' pre-petition mortgage; trustee could file another motion for abandonment).
(plaintiff entered into contract to buy home advertised as having 3,792 square feet; purchase agreement did not denote square footage, but only stated that any reference to size of home was an estimate and stated that if square footage was material to the buyer that it had to be verified during inspection period; buyer sued claiming home only had 3,605 square feet and trial court dismissed case; affirmed on appeal - fraud claims barred by statute of limitations and verification provision constituted disclaimer of liability for any representation of size of home).
(defendant refused to pay for water damage to plaintiff's home caused by breakage of frozen pipes caused by lack of heat to home; jury ordered defendant to pay $100,000, but jury award vacated on appeal and defendant granted summary judgment because plaintiff did not live in the house at time pipes burst and had not lived there for the prior two years, thus requirement of insurance policy that plaintiff "reside" in the home not satisfied; plaintiff failed to notify defendant of change in occupancy status of home - simply notifying defendant of change in billing address not sufficient notice of change in occupancy status).
(petitioner qualified as “innocent spouse” for purposes of relief for tax deficiencies related to unsubstantiated business expenses on joint tax returns with former spouse; petitioner had no knowledge of lack of expense substantiation related to upkeep and management of sports bar).
(I.R.C. Sec. 45Q credit for carbon dioxide sequestration inflation adjustment factor for 2010 is 1.0118 resulting in a credit of $20.24/metric ton of qualified CO2 under I.R.C. Sec. 45Q(a)(1) and $10.12/metric ton of qualified CO2 under I.R.C. Sec. 45Q(a)(2)).
(creditor's motion for relief from automatic stay in Chapter 12 case granted; while debtor claimed agister's lien in cattle owned by debtor's company and asserted that lien was interest in cattle that were property of bankruptcy estate, court determined that no lien in cattle existed because debtor not primarily engaged in boarding, feeding and caring for livestock of others for compensation as required by agister lien statute; even if debtor had lien position in cattle, court determined that stay should be modified due to lack of adequate protection).
(petitioners' lease of farm property to farming corporation under oral leases not eligible for expense method depreciation because non-corporate lessor rule violated (term of leases indefinite) and no exception applicable; penalty assessed (court did not discuss trade or business requirement)).
(court reverses Tax Court ruling that dismissed petitioner's challenge of innocent spouse relief; IRS failed to send its determination to petitioner's last known address and petitioner actually filed a timely petition based on time notice received).