After thinking about the information you submitted to me about your taxes, there were several issues which I observed. Firstly, I would like to talk about John Smith's issues: 1(a) I think the $300,000 received by John Smith as fees from jury award is taxable for federal tax income purposes. Because as the IRC Sec 104(a)(2) law: any winnings in a personal injury lawsuit that cover the treatment of physical injuries are not taxable except for attorney fees which are taxable. Taxability also depends upon the place of residence of the taxpayer. (1) In Codman Vs. Commissioner, held that attorney fees paid to the attorney not to be included in the gross income of the claimant in favour of whom the personal injury lawsuit is settled.
B) the U.S. Court of Federal Claims has ruled differently on the issue in the taxpayer's jurisdiction. C) the Court of Appeals in the circuit to which the Tax Court decision would be appealed has ruled differently on the issue. D) the IRS has indicated that it will acquiesce. 63) Identify which of the following statements is false. A) When a court opinion discusses facts and issues on which the court does not rule, the comments are called dicta.
In February 2011, the case is settled, and Joe refunds $2,500 to the customer. When Joe prepares his 2010 tax return in April 2011, he will include only $1,500 of net revenues from that customer. Your Answer: False The claim of right doctrine requires the recipient of disputed funds to recognize the income. Joe will include the full $4,000 in his 2010 taxable income because he had full control over the funds. He will be allowed to take a deduction on his 2011 tax return for the $2,500 repaid the customer.
The parole evidence rule requires, in the absence of fraud, duress, mutual mistake, or something of the kind the exclusion of all prior or contemporaneous oral or written evidence that would add to or vary the parties’ integrated written contract.”(Mallor, 2013, Pp448-451). Therefore, paying the taxes by the seller would be considered as if it “supplement, change, or contradict the terms of the written contract”. The contract also contained a clause requiring any modifications of the contract to be in writing, and Dyer failed to include the salesperson’s promise in writing. The court ruled the case in favor of Walt Bennett Ford. http://ar.findacase.com/research/wfrmDocViewer.aspx/xq/fac.19820414_0043514.AR.htm/qx Mallor, Barnes, Bowers, & Langvardt (2013).
* The transaction does not have tax avoidance purpose. Issues The main issue encountered in this case is whether the contingent environmental liabilities assumed by Patten is a liability that would give rise to a deduction within the meaning of Internal Revenue Code (IRC) section 357 (c)(3) and whether Cho’s basis in the stock is determined by reference to Section358 (d)(1) or Section 358 (d)(2). The issue for Patten is how to determine the tax consequence based on the transaction. Applicable Laws The most pertinent Sections are directly cited form Code and listed as below: IRC Section 351(a): “No gain or loss shall be recognized if property is transferred to a corporation by one or more persons solely in exchange for stock in such corporation and immediately after the exchange such person or persons are in control (as defined in section 368(c) of the corporation.” IRC Section 357(a): “Except as provided in subsections (b) and (c) , if— (1) the taxpayer receives property which would be permitted to be received under section 351 or 361 without the recognition of gain if it were the sole consideration, and (2) as part of the consideration, another party to the exchange assumes a liability of
The Supreme Court has ruled that a professional gambler is entitled to deduct gambling losses as a trade of business expense. The fact that the taxpayer did not offer goods or services to others did not preclude characterization of the activities as a trade or business, rather, the appropriate “business” test was that the taxpayer must be involved in the activity with continuity and regularity and the taxpayer’s primary purpose for engaging in the activity must be for income or profit. (R.P. Groetzinger,87-1 USTC 9191 480 U.S. 23, 107 S Ct. 980 1987, 9622, 771 F.2d 269 (CA-7 1985). Since the expenses for lodging and travel you incurred were related to non business activities they would be considered personal expenses and as such cannot be deducted on his tax
And as ruled in Donald and Denise Hastings v. Commissioner of Internal Revenue, since the gambling activities are limited to the weekends, they are excluded from consideration as a business activity. It is for these reasons that Dr. Green should not attempt to classify the expenses as a trade or business but instead should claim any winnings as
U.S. Supreme Court MENNONITE BOARD OF MISSIONS v. ADAMS, 462 U.S. 791 (1983) Case Outline: Mennonite board of missions v.Adams Date Argued : March 30,1983 Decided : june 22,1983 Parties: Appellant : Mennonite Board of missions (MBM) Appellee : Adams Forum: U.S.Supreme court Appellant legal argument: He had not received the constitutionally adequate notice of the pending tax sale and of the opportunity to redeem the property following the tax sale. Appellee legal argument: Adams filed a suit in state court seeking quite title as no one redeems the property during the redemption period. FACTS • In March 1, 1973 Alfred Jean Moore executed a mortgage in favor of appellant MBM in Elkhart, Indiana that she had purchased
The Foreign Corrupt Process Act focus is on the purpose of the payment as an alternative of the exact functions of the officials receiving offer, the payment or promise of payment, and there are exceptions to the anti-bribery stipulation for "facilitating payments for routine governmental action"; the last is ‘Business Purpose Test' Here the Foreign Corrupt Process Act does not allow payments made in order to help the firm in retaining or obtaining business with or for directing business to, any person. The Department of Justice interprets retaining business broadly such that the term encompasses more than award or renewal of a contract. Notice that the business to be retained or obtained does not need being with a foreign government instrumentality. The Foreign Corrupt Process Act prohibits corrupt payments through intermediaries says it is illegal to make a disbursement of cash to a third individual, all through knowing that a portion or all of the payment will go indirectly or directly to a foreign official. The term "knowing" included conscious disregard and intentional ignorance.