Redemptions of ESOP Shares Were Deductible Dividends
The question of whether the distributions to plan participants are deductible dividends depends on who owned the convertible preferred stock when the redemptions took place.
Walford v. Commissioner
The overvaluation of an "emergency management system" resulted in the Commissioner disallowing a deduction made on the basis of the value of that asset. Subsequent sale showed act ...
Tax Court, Frustrated by Inadequate Data, Inscrutable Analyses, Bases Reasonable Compensation on RMA Ratios
The issue in this case was the reasonableness of compensation paid to the shareholder and primary officer of Brewer Quality Homes Inc. (Brewer).
Square D. Company and Subsidiaries v. CIR
The full Tax Court considered how to measure reasonable compensation in relation to golden parachute payments for sec. 280 (G) purposes. The Tax Court determined the multifactor test was the more appropriate than the independent investor test under this s ...
Deduction of Golden Parachute Payments as Compensation Limited by Sec. 280G
The full Tax Court considered how to measure reasonable compensation in relation to golden parachute payments for sec. 280 (G) purposes.
E.J. Harrison and Sons, Inc. v. Commissioner
Issue is whether compensation paid to taxpayer's officer was reasonable compensation that was therefore deductible.
Entire Settlement Payment Is Purchase Price
One of the issues for the Tax Court was whether $4,856,922 of a $19,886,922 settlement made by Indeck Energy Services, Inc. to Michael P. Polsky was interest deductible by Indeck and recognizable as ordinary income to Polsky or whether it was part of the purchase price for shares of Indeck stock held by Polsky.
James G. Robinson v. United States
The U.S. Court of Appeals for the Federal Circuit remanded to the Court of Federal Claims the task of valuing a CEO’s stock includible in the CEO’s compensation under sec. 83 and deductible to the S corporation that employed him. The Federal Circuit decli ...
Section 83(h) Deduction Based on Actual Value of Transferred Stock
The U.S. Court of Appeals for the Federal Circuit remanded to the Court of Federal Claims the task of valuing a CEO’s stock includible in the CEO’s compensation under sec. 83 and deductible to the S corporation that employed him.
Brewer Quality Homes, Inc. v. Commissioner (I)
Issue is the extent to which amounts that petitioner paid to shareholder-officer are deductible as reasonable compensation under section 162(a)(1).
Frontier Chevrolet Co. v. Commissioner
Issue is whether company's redemption of 75% of its stock was an “acquisition” within the meaning of IRC section 197, and whether the covenant not to compete needed to be amortized.
8th Circuit Reallocates Value of Covenant Not to Compete to Intangible Assets Using a Nine-Factor Test
The parties to the sale of a beer distributorship allocated $1 million to the covenant not to compete and assigned no value to the company's intangible assets.
Boise Cascade Corp. v. United States
Issue is whether distributions to ESOP plan participants are deductible dividends.
Bank One v. Commissioner
Petitioner sought review of tax deficiency assessment based on taxpayer's use of financial derivatives to manage financial risk. Discussion of fair market value.
Indeck Energy Services, Inc. v. Commissioner
Issues are whether part of settlement payment constitutes interest deductible by Indeck and recognizable as ordinary income by petitioners, and whether penalties apply.
Langdon v. Commissioner
The IRS challenged the allocation of purchase price of company to the covenant not to compete and intangible assets, and assessed additional income taxes due.
Tax Court Chooses Market Approach Over Asset Approach
The issue in this consolidated case involving the Caracci family was whether the value of the Sta-Home Health Agency Inc. (SHHA) and related entities transferred into S corporations exceeded the consideration paid.
Caracci v. Commissioner (I)
The issue was whether the value of the Sta-Home Health Agency, Inc. (SHHA) and related entities transferred into S corporations exceeded the consideration paid.
Haffner's Service Stations, Inc. v. CIR
The Tax Court determined that the petitioner’s compensation deduction with regard to its majority stockholders/corporate officers’ bonuses was unreasonable. The Tax Court applied the multifactor test viewed through the lens of a reasonable investor. The ...
Reliance on RMA Data Rejected
The Tax Court determined that the petitioner’s compensation deduction with regard to its majority stockholders/corporate officers’ bonuses was unreasonable.
South Tulsa Laboratory, Inc. v. CIR
The Tax Court determined that the clinical business South Tulsa spun-off was not eligible for nontax treatment under IRC sec. 355 because on the same day the spin off occurred the new business was sold. The Tax Court found that the spin off violated a qua ...
Actual Sale Is the Best Evidence of FMV
The Tax Court determined that the clinical business South Tulsa spinoff was not eligible for nontax treatment under IRC sec. 355 because, on the same day the spinoff occurred, the new business was sold.
Control Premium Considered
The U.S. Tax Court considered whether the 50% interest Framatome’s subsidiary, Burndy-US, had in Burndy-Japan was qualified to be treated as a controlled foreign corporation (CFC) for tax purposes.
Framatome Connectors USA, Inc., et al. v. CIR
The U.S. Tax Court considered whether Framatome’s subsidiary, Burndy-US’s 50% interest in Burndy-Japan was qualified to be treated as a controlled foreign corporation (CFC) for tax purposes.
Deja Vu-Lynnwood, Inc. v. U.S.
Adult Club Dancers/Tenants Are Independent Contractors ...