By John G. Hodnette An F reorganization, as discussed in The Basics of F Reorganizations, is a tax-free “mere change in identity, form, or place of organization of one corporation, however effected” pursuant to Section 368(a)(1)(F). Although a simple example of an F reorganization is the change of a corporation’s state of incorporation, the broad definition […]
By Brian C. Bernhardt A recent case in the Court of Federal Claims confirmed taxpayers may be entitled to refunds of interest and penalties paid during the COVID-19 pandemic if they act before a forthcoming deadline. The National Taxpayer Advocate estimates tens of millions of taxpayers may be entitled to refunds. The opportunity includes a […]
By John G. Hodnette and Savannah Rankich The general rules for qualified small business stock (“QSBS”) were discussed previously in “Gain Exclusion for Section 1202 Stock” and updated in “Expanded Benefits for Qualified Small Business Stock Under the OBBB.” For taxpayers to qualify for this gain exclusion, the issuing C corporation must meet the active […]
By John G. Hodnette In my prior post, Installment Sale Notes Owned by S Corporations, I discussed sales of S corporation assets in exchange for a promissory note, invoking the installment sale method of Section 453. Buyers commonly use the installment sale method for earnouts, which provide additional contingent consideration based on the performance of the […]
By John G. Hodnette Section 199A, as discussed in my prior blog post Section 199A Pass-Through Deduction and the Magic Number, provides for a deduction generally equal to the applicable pass-through entity’s qualified business income. However, the deduction is available only for a qualified trade or business, which Section 199A(d)(1) defines as any trade or business […]
By John G. Hodnette Section 338(h)(10) allows a buyer and seller in a qualified stock purchase to elect jointly for the sale of target stock to be treated for tax purposes as a sale of the target’s assets. That is beneficial to the buyer because the transaction is a stock sale for state law purposes (which […]
By Kimberly B. Tyson On February 18th, the Center for Art Law is sponsoring a lecture by Deborah Gerhard, the Paul B. Eaton Distinguished Professor of Law at UNC School of Law. The topic is the “Madonna and Child in a Landscape,” the famous (and infamous) piece that has adorned the North Carolina Museum of […]
By Kimberly B. Tyson On January 6, 2026, in Gibson v. Commissioner, T.C. Sum. Op. 2026-1 (a nonappealable “S” case), the Tax Court sustained the IRS’s disallowance of a charitable contribution deduction of $188,563 for high-end cycling apparel that taxpayers donated in 2019. The court’s analysis of the appraiser regulation reminded me of Jan Brady, […]
By John G. Hodnette Since its enactment on March 30, 2010, in connection with the Affordable Care Act, Section 1411 has assessed an additional 3.8% income tax on individuals, estates, and trusts on the lesser of net investment income (“NII”) or the excess of the taxpayer’s modified adjusted gross income over the threshold amount. There are […]
By Keith A. Wood 1. Taxpayer Denied a Bad Debt Deduction even though the Borrower had Cancellation of Debt Income; Kelly v. Commissioner, 139 F.4th 854 (9th Cir. 2025). Between 2007 and 2010, Mr. Kelly loaned millions of dollars to his business entities. In December 2010, Mr. Kelly cancelled a portion of the debts his […]