Author Archives: David L. Silverman, J.D., LL.M. (Taxation)

Regs Permit Flexibile Basis in Stock Sales

Normally, when one disposes of property, realized gain or loss is directly dependent upon basis.  Being closely related to initial cost, basis is a tax attribute over which the taxpayer generally has little control at the time of the property’s … Continue reading

Posted in Property Transactions | Leave a comment

Electing S Corporation Status

In many respects, the S corporate form is a hybrid entity.  For most legal purposes, except taxation, an S corporation respects its lineage and is governed by the same laws that govern C corporations.    However, for tax purposes, S corporations … Continue reading

Posted in Corporate Tax, S Corporations | Leave a comment

Taxation of Property Transfers

The Internal Revenue Code taxes “gains derived from dealings in property.” However, two types of gains exist, and the Code taxes only one. “Realized” gains are not subject to taxation. This type of gain represents net appreciation in property that … Continue reading

Posted in Property Transactions, Timing of Income and Deductions | Leave a comment

Defusing IRS Tax Liens & Levies

Once imposed, Federal tax liens threaten the taxpayer’s ability to continue in business, since creditors and potential purchasers may then shun dealings with the taxpayer. Tax levies may be even worse, since they result in the immediate deprivation of the … Continue reading

Posted in IRS, IRS Liens & Levies | Leave a comment

Revenue Reconciliation Act of 1993

Though not constituting a sea change in the tax law, the Revenue Reconciliation Act of 1993 nevertheless deviates substantially from the tax course charted by the Tax Reform Act of 1986. President Clinton has apparently kept his promise of not … Continue reading

Posted in From Washington, Tax News & Comment | Leave a comment

Death-Terminating Installment Notes Held to Generate Taxable Income

The Court of Appeals for the 8th Circuit, affirming the decision of a divided Tax Court, has found that installment notes which terminate upon the death of the obligee generate taxable income to his estate. Frane v. Commissioner, 93-2 USTC … Continue reading

Posted in Federal Income Tax, Installment Reporting, SCINs | Leave a comment

Taxation of Stock Options

Stock options permit the investor to magnify the change in stock price during a specified, usually short, period of time. In exchange for the right to control large amounts of stock, the option holder assumes the risk that if the … Continue reading

Posted in Incentive Stock Options | Leave a comment

Life Insurance Trusts

Life insurance can be an invaluable estate planning tool. It can provide a broad measure of financial security for loved ones as well as provide the liquidity necessary to meet tax and other estate settlement obligations. Ownership of a life … Continue reading

Posted in Life Insurance Trusts, Trusts | Leave a comment

IRS Statutes of Limitations

The prudent taxpayer will file an accurate and timely return  whether or not the stated tax liabilities are satisfied by payment at the time of filing.   Only by doing so will the taxpayer “trip” the period of limitations for I.R.S. … Continue reading

Posted in IRS | Leave a comment

Deductibility of Business Expenses

Since personal expenses are not deductible under the tax law, deductibility of an expense requires that the expense be a business or investment expense. Generally, such expenses relate to activities that are engaged in for profit. While business and investment … Continue reading

Posted in Business Expenses, Deductions | Leave a comment

Deductibility of Medical Expenses

Expenses incurred for medical care are deductible to extent they exceed 7.5% of the taxpayer’s adjusted gross income, as provided by Code Sec. 213.  Accordingly, a taxpayer with $75,000 of adjusted gross income would be allowed no deduction for medical … Continue reading

Posted in Deductions, Medical Expenses | Leave a comment

Tax Refund Litigation

To commence a lawsuit against the I.R.S. seeking the refund of federal taxes erroneously or illegally assessed or collected, a taxpayer must select a court of proper jurisdiction.  Jurisdiction to hear federal tax cases is conferred by federal statute, and … Continue reading

Posted in Federal Tax Litigation, Tax Refund Litigation | Leave a comment

Partnership Taxation

A partnership, for tax purposes, is defined by negative implication.  It is a “joint venture” or similar organization engaged in business that is not classified as a trust, corporation or estate. Partnerships, unlike corporations, generally pay no income taxes. Taxes … Continue reading

Posted in Partnership Taxation, Tax Decisions, Tax News & Comment | Leave a comment

Substantiation Required for Charitable Contributions

Two significant statutory limitations now restrict the deductibility of charitable contributions. These limitations, the result of changes made in the tax law in 1993, impose new requirements relating to substantiation and disclosure. Amended Code Sec. 180(f)(8) now requires that all … Continue reading

Posted in Charitable Contributions | Leave a comment

Consumption Taxes?

Our tax system relies primarily on the imposition of income taxes imposed upon persons and entities to fund governmental operations. Estate and gift taxes play a minor role in revenue collected by the Treasury. For  some time, consumption taxes have … Continue reading

Posted in Consumption Tax | Leave a comment