Annotations 12/2010

(Reno, NV, tax preparation business acquired airplane to use on business trips to meet clients; expenses associated with plane and lease agreement with petitioner's father for use of father's property which was used for both personal and business reasons resulting in many denied deductions; expense reimbursement program did not result in deductions passing through from S corporation and petitioner had constructive dividends from rent payments). 

(press release admits that "tens of thousands" of jobs in the wind energy industry would be lost if the Congress does not renew the industry's tax subsidy (investment tax credit for wind energy); release makes no mention of academic study showing that for each job created by the industry, more jobs are lost elsewhere in the economy). 

(Indiana law permitting a wine dealer to make off-premises deliveries of wine to a location designated by a customer only if the delivery is made by the dealer itself or a dealer's employee who holds an employee permit upheld as constitutional). 

(case involves level of proof necessary to show liability as an "arranger" for moving a hazardous substance from one tract to another under CERCLA; no causal link required to be shown between hazardous waste and response costs plaintiff incurred, but evidence must show that defendant deposited hazardous waste at site in question; no evidence present of such transportation in this case involving lateral migration). 

(payments made by cooperative to farmer members and other members constitute Per Unit Retains Paid in Money; co-op's DPAD to be computed without taking into account any deduction for the payments). 

(plaintiff, a distributor/seller of fertilizer to farmers, sued defendant, bulk seller of farm fertilizers to distributors on claim that contract they entered into in July of 2008 for delivery of anhydrous in April of 2009 was not valid because it lacked defendant's signature; plaintiff had signed the contract and made downpayment, but market price of anhydrous dropped significantly below contract price by fall of 2008; court upheld validity of contract - downpayment made and defendant's practice was to file contracts without signing them and contract language did not require defendant's signature; plaintiff accepted contract by signing it and making downpayment). 

(Iowa Code Sec. 441.21(1)(d) requiring all property subject to taxation to be valued at actual value and equalization of actual value in one assessing jurisdiction to that of another on adjoining properties within five percent unless adequate reasons present for greater differential, inapplicable to agricultural property; ag property to be valued on basis of productivity and net-earning capacity; 36 percent variation in value of adjacent tracts at issue). 

(defendant disqualified 1.34 acres of plaintiff's farm from classification as farm use for tax purposes; 1.34 acres was summit of a mountain containing telecommunication devices and road, but cattle grazing also occurred; based on applicable regulation, subject tract not used for farming purposes). 

(plaintiff failed to provide evidence that defendant breached a duty of care owed to plaintiff in failing to clear downed power lines; or that such failure proximately caused plaintiff's injuries). 

(couple's motion denied that would have compelled competing business to produce its own tax returns; company satisfied burden of showing that information contained in requested returns was available in financial statements that were provided to couple). 

(petitioner not entitled to charitable contribution deduction for gifts of paintings to Los Angeles Urban League, Catholic Big Brothers and Sisters, various universities and churches (that petitioner attended "because he was discussing a possible divorce" and for which he made payments each time attended); petitioner claimed to have maintained a journal of his charitable contributions; no written substantiation from donees; no deduction allowed; accuracy-related penalty applied). 

(taxpayer not entitled to claim deductions from llama operation because not engaged in with requisite profit intent; no separate business account maintained, not members of any llama registry during years at issue, only 3 hours daily spent in business, no llamas sold for several years, no attempt to increase breeding quality, taxpayers lied about conversations with llama expert, no reasonable expectation that assets would appreciate in value, no experience in livestock operations, significant losses incurred for many years, no income, substantial income from other sources present, elements of personal pleasure present). 

(provides further guidance on the scope and application of the I.R.C. Sec. 45R credit contained in the Health Care Act; among other things, Notice says that the definition of “family members” for purposes of § 45R does not specifically refer to spouses; but IRS now takes the position that spouses of certain business owners are not to be taken into account as employees by operation of the ownership attribution rules in the Code; specifically IRS says that the following individuals are not to be taken into account as "employees" for purposes of § 45R: (1) the employee-spouse of a shareholder owning more than two percent of the stock of an S corporation; (2) the employee-spouse of an owner of more than five percent of a business; (3) the employee-spouse of a partner owning more than a five percent interest in a partnership; and (4) the employee-spouse of a sole proprietor). 

(plaintiff paid taxes on takeout bonus payments paid by state of Florida in relation to Hurricane Andrew in 1992; takeout bonuses were non-shareholder capital contributions under state law that were excludible from gross income; plaintiff entitled to tax refund). 

(256 acres of GMO sugar beet seedlings ordered destroyed ("removed from the ground") by December 7 pending appeal to Ninth Circuit because USDA "rushed to grant" permits to commercial growers (such as Monsanto); court had previously ruled that USDA had not conducted adequate environmental review). 

 (taxpayer was mortgage banker that purchased and re-sold foreclosed properties (classic fix and flip transactions with expenses for two of the three years at issue reported on Form 4797) resulting in substantial gain that taxpayer claimed was either capital gain or royalty income; income determined to be ordinary in nature, and taxpayer engaged in trade or business such that income on sales subject to self-employment tax). 

(plaintiff paid taxes on takeout bonus payments paid by state of Florida in relation to Hurricane Andrew in 1992; takeout bonuses were non-shareholder capital contributions under state law that were excludible from gross income; plaintiff entitled to tax refund). 

(computation of gain on sale of timber tied to how taxpayer has treated the timber for tax purposes during period of ownership; upon acquisition of land with timber on it, taxpayer should allocate basis between land and timber).