Cantor v. IRS, T.C. Summary Opinion 2014-103 (Nov. 6, 2014).
The Tax Court put out a couple cases last Thursday (11/6), none friday. Cantor v. IRS, TC Summary Op 2014-103 does a bit of an injustice to blue collar businessmen. There, taxpayer was in the business of automotive, residential, and commercial glass install/repair. He also owned some rental property connected with his business. Taxpayer attempted to deduct his losses from his realty activities, but the IRS and TC allowed the Sec. 469 passive investment loss limitations to stop him. The injustice was that the Court focused on a narrow distinction of Taxpayer's activities--separating installation activities from what it construed to be actual construction. He, like other tradesmen making ends meet don't track their time between activities like lawyers (and former lawyers--TC judges). See pp. 10-11. So Taxpayer's attempt to deduct losses for his realty (which were really just costs of doing business) was disallowed basically because he doesn't keep 6-minute records of his activities. Pretty harsh record-keeping requirement if you ask me.
See Full Disclaimer Below.
Copyright © 2014 E.F.M. Law Company, P.C.
All Rights Reserved.