Morton v. United States, 98 Fed. Cl. 596 (Fed. Cl. 2011)

(summary judgment case where taxpayer claims entitlement to refund because defendant improperly denied business expenses and depreciation deductions and incorrectly required plaintiff to recognize gain on transaction designed to qualify as like-kind exchange involving aircraft; plaintiff claimed business expense deductions allowed because personal business activities and business activities of corporate entities are intertwined sufficiently to be viewed as a "unified business enterprise; taxpayer was significant owner of Hard Rock Cafe restaurant chain and used aircraft that were owned in various S corporations; IRS disallowed business expense deductions related to aircraft because S corporations not operated for profit; court applied "unified business enterprise theory" such that losses generated by S corporations (or other pass-through entities) can be aggregated with taxpayer's other activities conducted either individually or through commonly controlled entities to determine if overall profit motive present for purposes of I.R.C. Sec. 183; court's analysis specific to S corporations and other pass-through entities (with such transactions typically arising where taxpayer owns property that is leased to related business operation), and likely not applicable to C corporations; categorization of aircraft transaction as like-kind exchange dependent on substantiation of business expenses, so no ruling on validity of like-kind exchange treatment; taxpayer's motion for summary judgment granted in part and denied in part; defendant's motion for summary judgment denied). 

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