DiscoverSCACPA's Weekly Federal Tax UpdateFederal Tax Update with Lynn Nichols #46
Federal Tax Update with Lynn Nichols #46

Federal Tax Update with Lynn Nichols #46

Update: 2019-09-05


Lynn Nichols Federal Tax Update Podcast
September, 5 2019, Episode 46

Listen as Lynn Nichols provides commentary on 5 Items pertaining to current developments in U.S. tax law.

  1. Solving the Problem of ‘Substantially All’ in the O-Zone Rules

In news analysis, Marie Sapirie attempts to parse the differences in the term “substantially all,” as the same phrase in the same statute has two different numerical thresholds.

[Tax Notes Today, 8/19/2019, Article by Marie Sapirie}



  1. Timber, Lumber Companies' Value Determined for Gift Tax Purposes

The Tax Court, adopting the report of an estate’s valuation expert and rejecting the IRS’s expert valuation, determined the value of limited partnership units in a timber company and determined the value of stock in a lumber manufacturing company for gift tax purposes.

[Estate of Aaron U. Jones et al., T.C. Memo. 2019-101, 8/19/2019]



  1. Couple’s Rental Real Estate Loss Disallowed as Passive

The Tax Court sustained the IRS’s disallowance of a couple’s rental real estate loss as a passive activity loss, finding that neither of them performed more than 750 hours individually in a real estate activity during the year; therefore, neither of them qualified as a real estate professional under section 469(c)(7)(B).

[Ronnie Hairston et ux.; T.C. Memo. 2019-104, 8/20/2019]



  1. Default on Retirement Plan Loan Caused Deemed Distribution

The Tax Court in a summary opinion held that a couple received a deemed distribution from the husband’s retirement plan when he defaulted on a loan from the plan despite later resuming payments, finding that the grace period had expired and he failed to cover the missed payments. The court also noted that there is no hardship exception to the section 72(t) additional tax.

[Gerard J. McEnroe et ux.; T.C. Summ. Op. 2019-21, 8/20/2019]



  1. Proposed Regs Published on Maximum Value of Employer-Provided Vehicles

The IRS has published proposed regulations (REG-101378-19) regarding special valuation rules for employers and employees to use in determining the amount to include in an employee’s gross income for personal use of an employer-provided vehicle.

[REG-101378-19; 84 F.R. 44258-44262,8/22/2019]









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Federal Tax Update with Lynn Nichols #46

Federal Tax Update with Lynn Nichols #46