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Federal Tax Update — April 2017

from By David S. De Jong, Esq., CPA, Stein Sperling Bennett De Jong PC

In Alexander v. Commissioner, TC Summary Opinion 2017-23, the Tax Court determined that a disbarred attorney who assisted a lawyer for payment had taxable compensation and did not receive a gift for the work done.

In Hurford Investments No. 2 Ltd. v. Commissioner, Docket No. 23017-11, the Tax Court granted summary judgment to a taxpayer who had argued that a transferee of phantom equity has a capital asset following a taxable transfer with the ability to get a step up in tax basis as the result of death.

In Penley v. Commissioner, TC Memo 2017-65, the Tax Court found that a full-time employee did not work more hours in real estate selling and managing three rental properties than the 2,194 hours he spent in his unrelated employment. In Windham v. Commissioner, TC Memo 2017-68, the Tax Court determined that a stockbroker who averaged 2 1/2 hours a day in the office and who claimed 900 hours a year managing 11 properties was a real estate professional and met the test for material participation on a property by property basis, allowing her to deduct losses on these properties. more

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