Thought-provokinganalysis and opinion on federal tax issues

NY Times Story On Trump Taxes: The Internal Revenue Code Favors Real Estate Professionals but….

September 28, 2020

by Monte A. Jackel

I wrote a post yesterday evening on LinkedIn. Here is the link. The text is reproduced below. I am not offering a view, one way or the other, on the merits of the matters discussed. Who could competently do that without adequate facts and requisite knowledge? But I can say that the tax law has long favored real estate. Favorable provisions for the real estate professional are scattered throughout the Internal Revenue Code. Perhaps that is the best place to start.

Text of Post:

“This story showed up [an hour or so ago] in the NY Times relating to President Donald Trump’s taxes. The article touches on a number of enumerated issues which look fairly typical of a well to do real estate developer: 1. The 2011 tax court case referenced in the story is at TC Memo 2011-74 and relates to the reasonableness of compensation paid as “consulting fees”; 2. The application of section 108(i); 3. section 465 qualified nonrecourse financing rule; (4) section 469 real estate professional rule; (5) section 108(b) reduction in tax attributes; (6) NOL carrybacks and carryforwards; (7) a 2009 NOL that is asserted to an ordinary loss from abandonment or worthlessness (See RR 93-80 and Echols case); (8) possibly compensating family members; 9. section 162 ordinary and necessary expenses test; 10. deduction of conservation easements; 11. rental versus personal use. The story states that whoever(s) gave the Times the info was legally entitled to have access to it-but were the(y) legally free to give it to the NY Times? The story also must have had tax attorney or CPA background help although no names are mentioned.”