By Keith A. Wood Tax Court Again Rules Emotional Distress is Not Physical Illness. In Tressler v. Commissioner, T.C. Summ. Op. 2021-33, the Tax Court held emotional distress damages are not excluded from income unless those emotional damages are attributable to a direct physical injury. Ms. Tressler brought a lawsuit against her former employer for […]
By John G. Hodnette Section 731(c) generally treats marketable securities as money in determining gain or loss on a distribution to a partner. Section 731(a)(1) provides no gain is recognized on a distribution to a partner except to the extent any money distributed exceeds the adjusted basis of the partner in the partnership interest. The […]
By Linda Nelson On November 1, 2021, the Chief Judge of the Office of Administrative Hearings, Donald van der Vaart, issued a memorandum announcing all OAH records of every tax case will be available to the public following an administrative law judge’s final decision. https://www.oah.nc.gov/ The promotion of transparency in North Carolina tax appeals began […]
By John G. Hodnette The most common penalties assessed by the IRS are the failure to file and failure to pay penalties under Section 6651. However, another common penalty is the failure to pre-pay penalty assessed pursuant to Section 6654 where a taxpayer who is required to make quarterly payments fails to make the payments. […]
By John G. Hodnette In 2017, North Carolina sales and use tax related to construction changed, creating a binary system. Although the Department of Revenue released Directive SD-18-1 to explain the new rules, they remain confusing to many service providers. Construction projects can be taxed under North Carolina sales and use tax in one of […]
By John G. Hodnette Holding real estate through an S corporation may seem like a good idea at first glance. Almost all professionals, however, recommend a partnership over an S corporation as the preferred vehicle to own real estate. S corporations and partnerships are both pass-through entities, meaning the income or loss generated by these […]
By John G. Hodnette For administrative convenience, federal and North Carolina law both provide that after a specific period of time, uncollected taxes are written off and released. This provides some relief for taxpayers who owe taxes for years long past as well as preventing tax agencies from fruitlessly pursuing old and cold liabilities. Section […]
By John G. Hodnette Limited liability companies can elect to be taxed under federal and state law in a number of different ways. One popular choice for small business owners is for an LLC to elect to be an S corporation. The primary tax advantage of operating as an S corporation is minimizing self-employment taxes. […]
By Keith A. Wood This is the second installment of this article. The first installment was previously posted on the Tax Section’s blog. I. No Easement Charitable Contribution Deduction Allowed Where Form 8283 Did Not Include Cost Basis Information. In yet another case of a failed charitable contribution donation deduction, in Oakhill Woods, LLC v. […]
By John G. Hodnette The decrease in the corporate tax rate by the 2017 Tax Act has made it more favorable for businesses to operate as C corporations. With more businesses opting to be C corporations, the gain exclusion of Section 1202 is more important. Section 1202 provides an exemption to eligible taxpayers of between […]