The Use of the Nonrecognition Provisions of Section 1031 in the Exchange of Partnership Interests: Recent Tax Court Cases
Article Abstract:
The Internal Revenue Service (IRS) contends the holding of a partnership interest is similar to the ownership of stocks, bonds, certificates of trust and many other security interests. An important case has brought this issue to the Tax Court. In the case of Norman J. Magneson, the court decided that because the immediate underlying asset of the partnership was real estate, he could exchange his interest in the general partnership tax- free by use of the nonrecognition provision of Section 1031 of the Internal Revenue Code (IRC). The court affirmed that the underlying real estate was not held for business or investment purposes. Basically, the tax ruling is in the exchange of general partnership interests, where the underlying assets are of like kind, and not held for business or investment purposes; the provisions allowing for nonrecognition are met. Other recent cases involving nonrecognition are Joseph R. Bolker and Carl E. Koch.
Publication Name: Taxes: The Tax Magazine
Subject: Law
ISSN: 0040-0181
Year: 1984
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Mandatory Retirement Contributions and the Section 414(h)(2) 'Pick-Up' Provision - An Overlooked Windfall for Qualifying Public Employees
Article Abstract:
An analysis of mandatory retirement contributions and the Internal Revenue Code (IRC) Section 414(h)(2) 'pick- up' provision demonstrates its impact as a boon to qualifying public employees. Kathryn Buckner and Doris Cash explain the 'pick-up' idea related to the IRC Code Section 403(b) tax-sheltered annuity, salary reduction plans and relevant maximum exclusion allowance. The discussion is applicable to all employees of units of government. The provisions of IRC Section 414(h) are presented as well as explanations of the functions of the Employee Retirement Income Security Act (ERISA) and the Tax Equity and Fiscal Responsibility Act (TEFRA). Special topics included are: mechanics of the annual addition, election limitations of IRC Section 415, IRC Section 403(b) formulas, maximum level premium, maximum (one-time) exclusion allowance and Tables I-XI used to illustrate potential benefits.
Publication Name: Taxes: The Tax Magazine
Subject: Law
ISSN: 0040-0181
Year: 1984
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Report on TEFRA Provisions with Respect to Award of Litigation Costs to Taxpayers and Increased Damages to the Government
Article Abstract:
The author reviews Internal Revenue Code Sections 7430 and 6673 added by the Tax Equity and Fiscal Responsibility Act (TEFRA). The practical impact on both taxpayers and the government is described. Emphasis is placed on the relevant meaning of terms such as reasonable litigation cost, prevailing party and exhaustion of administrative remedies. Fairness and impartiality are discussed. The Civil Rights Attorney's Fee Award Act of 1976 and the Equal Access to Justice Act of 1980 are relevant. There is a twenty-five thousand dollar ceiling on awards to taxpayers. It is deemed necessary to provide sufficient publicity for Code Section 7430 to promote public education as well as faith in the justice system and the Internal Revenue System.
Publication Name: Taxes: The Tax Magazine
Subject: Law
ISSN: 0040-0181
Year: 1984
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- Abstracts: Fulfilling the promise of Batson: protecting jurors from the use of race-based peremptory challenges by defense counsel
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