Description

If you thought the twists and turns of 2020 made it difficult to keep up with tax court cases, 2021 gave you a run for your money! Frequent guest Tony Nitti joins host Damien Martin for our third annual look at key lessons from Tony's top tax cases of the year. Here's an overview and summary of the sources mentioned in the episode:

#1: Holliday v. Commissioner, C. Memo 2021-69 and Blum v. Commissioner, T.C. Memo 2021-18 [05:20]

Malpractice award for mishandling divorce proceeding was includible in gross income concerning whether the award was a return of capital or taxable income. Mentioned in the discussion:

• Internal Revenue Code (IRC) Sections 61, 104, and 141
• Rul. 81–152
• Other cases discussed:
  • Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955)
  • Clark v. Commissioner, 40 B.T.A. 333 (1939)
  • Cosentino v. Commissioner, T.C. Memo 2014-186
  • McKenny v. United States, 126 AFTR 2d 2020-5943 (11th Cir. 2020)
  • Eisner v. Macomber, 252 U.S. 189 (1920)
  • Commissioner v. Groetzinger, 480 U.S. 23 (1987)

#2: United States v. Forte (D. Utah 2021) [24:49]

Both parties failed to prevail on ambiguous facts surrounding qualification for exclusion on the sale of a primary residence. Mentioned in the discussion:

• IRC §121
• PLR 201628002

#3: Ushio v. Commissioner, T.C. Summary Opinion 2021-27 [38:17]

Claiming an ordinary loss on a bad investment. Mentioned in the discussion:

• §§67(g), 165, 166, 1202, and 1244
• Rul. 93–80
• United States v. Generes, 405 U.S. 93 (1972)
• Trent v. Commissioner, 34 T.C. 910 (1960)

#4: PLR 202125004 and PLR 202114002 [50:09]

Mentioned in the discussion:

• IRC §§199A, 1045, and 1202
• Reg. §1.199A-5

#5: Heiting v. United States, 16 F. 4th 242 (7th Cir. 2021) [1:05:34]

Taxpayers were unable to prevail on unauthorized sale of stock by grantor trust under the claim of right doctrine. Mentioned in the discussion:

• IRC §§165 and 1341
• Other cases mentioned:
  • North American Oil Consolidated v. Burnet, 286 U.S. 417 (1932)
  • Nacchio v. United States
  • James v. United States, 366 U.S. 213 (1961)

#6: Berry v. Commissioner, T.C. Memo 2021-52 [1:19:48]

Taxpayer lacked sufficient evidence to assign income and deduct related expenses from drag racing tournaments. Mentioned in the discussion:

• IRC §162
• Other cases mentioned:
  • Deputy v. du Pont, 308 U.S. 488 (1940)
  • Palo Alto Town & Country Village, Inc. v. Commissioner, 565 F.2d 1388 (9th 1977)
  • Henry v. Commissioner, 362 F.2d 640 (1966)
  • Evans v. Commissioner, T.C. Summary Opinion 2012-125

#7: Hussey v. Commissioner, 156 T.C. No. 12 [1:30:30]

Reducing basis of assets when IRC §108(a)(1)(E) exception applies. Mentioned in the discussion:

• IRC §§61(a)(11), 108, 752, and 1017

#8: Tribune Company v. Commissioner, T.C. Memo 2021-122 [1:42:28]

Taxpayer's senior debt guarantees related to the disguised sale of the Chicago Cubs were bona fide but the subordinated debt by the Ricketts family was essentially equity. Mentioned in the discussion:

• IRC §§108, 737, and 752
• Canal Corp v. Commissioner, 135 T.C. No. 9 (2010)

#9: Slaughter v. Commissioner, 129 AFTR 2d 5399 (CA 11) [2:04:20]

Author was required to recognize income under a publishing contract as self-employed income. Mentioned in the discussion:

• IRC §§162 and 1402
• Commissioner v. Groetzinger, 480 U.S. 23 (1987)

#10: Aspro, Inc. Commissioner, T.C. Memo 2021-8 [2:12:32]

Purposed management fees to shareholders determined to be disguised dividends. Mentioned in the discussion:

• Reg. §1.162-7

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