Cooperative shares are not a home for 280A purposes

Article Abstract:

A taxpayer who owns shares in a cooperative housing association and uses the apartment to conduct a business is allowed to make deductions on business expenses according to 'Holmes.' Under the case, the IRS invoked Sec. 280A to challenge the claim of a partnership that it can make deductions while living in the apartment and paying rent to the partnership. The Tax Court, however, judged that the Sec. 280A is inapplicable to the case because the shares of the cooperative corporation are not a dwelling unit. In addition, the court dismissed the argument of the IRS that substance over form should be used as guideline and that the taxpayer should be deemed as the owner. Defending its decision, the court observed that the cooperative-share ownership is treated differently from ownership of real property. Lastly, the fact that Sec. 280A is applicable only to individuals and S corporations is cited as reason for allowing the partnership to avail of the deduction.

Housing, Cooperative, Housing cooperatives

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Wagering war with the Service: winning gambling deductions

Article Abstract:

The issue of tax deductions on gambling gains and losses continues to generate various interpretations and conflicting court decisions. The Tax Court, for instance, maintains that full-time gamblers are engaged in a trade or business and are therefore subject to the provisions of Section 162 of the Tax Code. Other circuit courts, however, reject the position of the Tax Court. This disagreement prompted the Supreme Court to rule in 'Groetzinger' that a taxpayer must be involved in a particular trade or business activity with distinct continuity and regularity to be considered engaged in that trade or business. Thus, gambling is neither a trade nor a business since it is sporadic in nature. Nevertheless, regular gamblers are advised to keep an adequate record of their activities and report smaller winnings to avoid tax problems.

Misc. Amusement, Recreation Services, Legal Gambling, Gambling Industries, Gambling

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High court narrows availability of home office deduction

Article Abstract:

The Supreme Court has ruled that the deductibility of home office-related costs is allowed only if the office qualifies as the taxpayer's primary place of business. In the Soliman case, the Court also specified two measures to determine if such expenses are deductible. These determinants are the importance of the tasks performed at the office and the amount of time spent in the office. Based on this test, the Court declared that the taxpayer in the Soliman case could not deduct a part of household expenses since he spends a substantial amount of his time performing service as an anesthesiologist in various hospitals. The taxpayer only uses his home office to call up patients and other doctors, read medical publications and balance his checkbooks.

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