September 01, 2015
Article Co-Authored by Donald Zidik, Tax & Business Services Director, "Directions in Individual Taxation," Featured in The Tax Advisor
- Several taxpayers were denied alimony deductions in Tax Court cases where payments were recharacterized as child support or a nontaxable transfer of property incident to divorce or were made under a divorce or separation instrument that did not terminate them at the death of the payee spouse.
- In two cases, the Tax Court dealt with the issue of whether the taxpayers had adequately substantiated that they qualified for real estate professional status without having contemporaneous records of time spent on their activity, finding in one case that the taxpayer did qualify and in the other that the taxpayer did not.
- The Seventh Circuit, overturning a decision of a district court, held in a case involving a challenge to the constitutionality of the Sec. 107(2) parsonage exclusion that the taxpayers did not have standing.
- The Tax Court in two cases addressed whether the refundable portion of certain New York state economic development credits was includible in the taxpayers' income.
- The IRS issued proposed regulations on qualified ABLE programs, which are designed to help disabled persons and their families save for and pay certain disability-related expenses.
This article covers recent developments in the area of individual taxation, including the treatment of support payments and IRA and qualified plan distributions, the Sec. 469 material participation rules, and the taxability of state economic development credits. The items are arranged in Code section order.