Bankrupt's spouse held liable for tax on joint return

Article Abstract:

IRC section 6013(d)(3) holds that filers of joint tax returns have joint and several tax liability, making Carolyn Kroh liable for her husband's tax after he filed for bankruptcy in Kroh v Commissioner. George Kroh had settled his liability with the IRS for half their claim, but his wife was not mentioned as a party in the suit. Therefore, the IRS was able to claim the remaining liability from her because joint and several liability did not create privity which would have precluded further litigation. The dissenting judges held that privity was created, but the majority held Carolyn Kroh liable.

Analysis, Cases, Tax administration and procedure, Tax administration, Tax appeals

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Tax Court allows charitable contribution deduction for land given by developer for community library

Article Abstract:

The Tax Court ruled in DuVal that a residential real estate developer that donated part of a parcel of land for a library was entitled to an income tax deduction for the full fair market value of the land. The IRS argued both that the contribution was not a gift but a transfer designed to induce a favorable zoning ruling and that the deduction amount should be limited to the taxpayers basis under IRC section 170(e)(1)(A). The Tax Court ruled in favor of the taxpayer on these two questions of fact.

Real estate developers, Donations, Valuation, Charitable contributions, Charitable donations

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Service publishes safe harbor from statute disallowing deductions for demolition expenses

Article Abstract:

IRC Section 280B disallows deduction of building demolition expenses for all types of structures, but it only applied to historic structures when it was first enacted. The section's extension to other structures' demolition costs illustrates the problems caused by constant tax code tinkering. However, the rules do provide safe harbors for structural modification when 75% of the structure is retained.

Laws, regulations and rules, Accounting and auditing, Buildings, Expense deductions, Wrecking, Demolition, Salvage (Wastes)

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