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The taxpayer argued that the costs of installation were deductible and the tax court agreed. The costs of installation only permitted the taxpayer to continue the plant’s operation. The expenses did not add to the value of the business or permit the taxpayer to make new uses of the basement. 4.
The court held that the travel expenses were compensation to the employee for services rendered to the company during 1972 and should be included in gross income. Therefore, when a company pays travel expenses, a taxpayer must include such compensation in gross income when the excursion is viewed as a reward for outstanding employee success ...
Though these payments qualified for § 162 deduction as expenses paid in the course of the opticians' trade or business, the IRS argued that the expenses should be disallowed as against public policy. [8] While the Court disapproved of the business ethics displayed by the opticians, the Court upheld the deductions as valid under the Code. [8]
The Second Circuit Court of Appeals reversed the Tax Court and held it to be a capital loss. [2] The U.S. Supreme Court agreed with the Second Circuit and held that it was a capital loss. [1] Allowing the income from the liquidation to be taxed as a capital gain, while allowing loss payments out of that income to be deducted as an ordinary ...
Tax Policy Center Institute Fellow Eric Toder estimates that the federal government could lose $87 billion in revenue for 2024 and $125 billion by 2028 if the court rules in the couple’s favor ...
Thor Power Tool Company v. Commissioner, 439 U.S. 522 (1979), was a United States Supreme Court case in which the Court upheld IRS regulations limiting how taxpayers could write down inventory. Thor manufactured equipment using multiple parts that it produced. It capitalized the costs of these parts when produced.
Managing your taxes can be one of the most complex aspects of estate planning and a new IRS rule change continues that trend. The rule, published at the end of March, changes how the step-up in ...
Internal Revenue Code § 212 (26 U.S.C. § 212) provides a deduction, for U.S. federal income tax purposes, for expenses incurred in investment activities. Taxpayers are allowed to deduct all the ordinary and necessary expenses paid or incurred during the taxable year-- (1) for the production or collection of income;