The issue of what is a capital asset is looked at in the Ninth Circuit's decision in Trantina v. United States, 2008 TNT 7-8.  In this case, an insurance agent was arguing that payments received from State Farm should have been taxed to him at capital gain rather than ordinary income rates.  Unfortunately, the United States District Court disagreed with the taxpayer, and the Ninth Circuit did so as well.

The materials are at available for download at http://www.edzollars.com/2008-01-28_Trantina.pdf .

The podcast is sponsored by Leimberg Informaton Services at http://www.leimbergservices.com .

This week we look at Revenue Procedure 2008-12 and final regulations under §7216, both of which deal with taxpayer authorizations for the use or disclosure of tax return information by tax preparers.  The new regulations contain a number of new requirements that will be imposed on tax preparers, and the Revenue Procedure contains specific language that must be used for taxpayers who are filing the Form 1040 series of forms.  These new requirements will take effect on January 1, 2009.

The written materials for the podcast can be downloaded from http://www.edzollars.com/2008-01-21_Consents.pdf .

The podcast is sponsored by Leimberg Information Services at http://www.leimbergservices.com .

The Supreme Court today decided the issue of whether investment fees paid by a trust was subject to the 2% of adjusted gross income limitation.  The Supreme Court in Knight v. Commissioner held that expenses are to be tested to determine if they are expenses that would not commonly or customarily be incurred by an individual--and only if they pass that test do they avoid the 2% limitation.

The materials are available for download at http://www.edzollars.com/2008-01-17_Knight_Time.pdf .

The podcast is sponsored by Leimberg Information Services at http://www.leimbergservices.com .

We look at a case where the IRS failed in an attempt to argue that a transaction had no economic substance or otherwise failed under the anti-abuse partnership regulations.  The case is Countryside Limited Partnership v. Commissioner, TC Memo 2008-3 where the taxpayers used the partnership distribution rules to allow two partners to have their interests in the partnership liquidated with no tax cost just prior to the partnership selling a significant asset at a gain.

The materials are located at http://www.edzollars.com/2008-01-14_Partnership.pdf .

The podcast is sponsored by Leimberg Information Services, on the web at http://www.leimbergservices.com .

We look at a case that illustrates the application of Section 108 in a situation with recourse debt.  While this case would likely have been covered by the relief in the Mortgage Foregiveness Debt Relief Act of 2007 if the property had been taken in 2007, it's still useful to review since many foreclosures won't qualify for the newly passed relief, but may still meet the insolvency test that worked for the taxpayers in this case.

The case is Keith v. Commissioner, TC Summary 2007-214 where the IRS's position did not garner much respect from the Tax Court.  We'll also look at what tax research gotchas may have caused the IRS to raise the positions that Tax Court so rapidly dismissed as just wrong and how to avoid those problems in your own practice.

The materials are located at http://www.edzollars.com/2008-01-08_Debt_Forgiveness.pdf .

The podcast is sponsored by Leimberg Information Services, located on the web at http://www.leimbergservices.com .

The IRS celebrated the end of 2007 by releasing three Notices late on December 31 that provide guidance on the application of the revised preparer penalties contained in the Small Business and Work Opportunity Tax Act of 2007 that was passed last May.  The IRS had previously released interim relief in Notice 2007-54, but that relief was set to expire as 2007 did.

The centerpiece of this guidance is Notice 2008-13, which provides interim guidance on applying the §6694 preparer penalty standards.  The interim rules are not nearly as onerous as many had feared they would be, and need to be incorporated rapidly into our practices as tax season approaches.  Note, as well, that this guidance applies only until the IRS releases revised regulations, something the notice indicates they plan to do during 2008.

The materials for this podcast can be downloaded at http://www.edzollars.com/2008-01-01_6694.pdf .  Those materials include the full text of all three notices.

The podcast is sponsored by Leimberg Information Services, located on the web at http://www.leimbergservices.com .

In this podcast, we look at a case where a shareholder attempted to argue that, in fact, the S corporation's election had been terminated a decade before due to an agreement with the founding shareholder that, in the taxpayer's view, created a second class of stock.  The case is Minton v. Commissioner, T.C. Memo 2007-372. 

The shareholder is not successful, though she does eventually succeed in unilaterally ending the S status of the corporation.  We'll look at both why the Tax Court didn't go along with her claim that a 1986 agreeement created a second class of stock, and the issues raised by her ability to unilaterally kill off the S election and what that suggests for those of us working with S corporations and/or succession plans.

The materials are available at http://www.edzollars.com/2007-12-31_S_Corporation_Class.pdf .

The podcast is sponsored by Leimberg Information Services, located on the web at http://www.leimbergservices.com .