Tax News

CCH (cch.taxgroup.com) reports:

  A married couple was properly denied a deduction for suspended passive losses on their S corporation stock because the stock became worthless two years prior to the year asserted by the couple. The couple claimed that the stock became worthless in the year a lawsuit filed by the corporation was settled because they expected that a recovery would have allowed the corporation to resume its prior activities. However, they failed to demonstrate the reasonableness of their belief that the lawsuit represented potential value for the corporation. The couple did not provide any evidence regarding the merits of the lawsuit or how the damages were calculated. Contrary to the couple's assertion, the corporation's hope that it would prevail in the lawsuit was not the same as the corporation's reasonable expectation that its future operations would succeed. Moreover, the private construction projects carried out by a division of the corporation did not demonstrate that the corporation retained any value. There was no evidence of how much work the division was doing, whether it was viable, or whether it could have reasonably generated enough money to allow the corporation to resume its public projects.

  Affirming a DC Ill., decision, 2007-2 USTC ¶50,680.

A. Bilthouse, CA-7, 2009-1 USTC ¶50,158

Other References:

 
Code Sec. 165

  CCH Reference - 2009FED ¶10,001.103

  CCH Reference - 2009FED ¶10,001.43

 
Code Sec. 469

  CCH Reference - 2009FED ¶21,966.70

 
Code Sec. 1366

  CCH Reference - 2009FED ¶32,084.425

  Tax Research Consultant

  CCH Reference - TRC BUSEXP: 30,262
CCH Reference - TRC BUSEXP: 30,262.30
 

CCH (cch.taxgroup.com) reports:

  The IRS has set forth the maximum allowable values of employer-provided automobiles, including trucks and vans, first made available to employees for personal use in calendar year 2009 for which the vehicle cents-per-mile valuation rule of Reg. §1.61-21(e) and the fleet-average valuation rule of Reg. §1.61-21(d), may be applicable. The maximum value for use of the vehicle cents-per-mile valuation rule is $15,000 for a passenger automobile and $15,200 for a truck or van. The maximum value for use of the fleet-average valuation rule is $19,900 for a passenger automobile and $19,900 for a truck or van.

Rev. Proc. 2009-12, 2009FED ¶46,251

Other References:

 
Code Sec. 61

  CCH Reference - 2009FED ¶1201.235

  CCH Reference - 2009FED ¶1201.24

  CCH Reference - 2009FED ¶5907.0325

  CCH Reference - 2009FED ¶5907.033

  CCH Reference - 2009FED ¶5907.80

  Tax Research Consultant

  CCH Reference - TRC COMPEN: 33,152.10
CCH Reference - TRC COMPEN: 33,154.05
 

CCH (cch.taxgroup.com) reports:

  President Barack Obama, in his inaugural address on January 20, reaffirmed the need to take "bold and swift" action to address the economic crisis in the United States. The 44th President of the United States said that overcoming the difficult challenges ahead will take time but the challenges "will be met."

  As the new president takes office amid a deepening U.S. recession, rising unemployment and financial market turmoil, he maintained that his administration will advance the measures necessary to create jobs and lay the groundwork for economic growth. "We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together," Obama said.

  Obama, in his remarks, cited the current financial crisis, the deteriorating housing market and business failures. He attributed the ""badly weakened" economy to "greed and irresponsibility on the part of some, but also our collective failure to make hard choices."

  In an effort to further stabilize the financial and housing markets, President Bush, at the behest of Obama, made a formal request to Congress on January 12 to release the second $350 billion tranche of the Troubled Asset Relief Program (TARP). The Senate approved the request, which granted the Obama administration access to the TARP funds

  On the role of the federal government, Obama stressed that the issue is not its size or scope but how well it works. Echoing the goals set by recent administrations to eliminate unnecessary federal programs --an effort which met with very limited success --Obama said the White House would keep the federal programs that work and end the unnecessary ones. He also maintained that there will be accountability and transparency over how U.S. taxpayer dollars are managed and spent.

  Obama ended his speech on a confident note. "In the face of our common dangers, in this winter of our hardship, let us remember these timeless words. With hope and virtue, let us brave once more the icy currents, and endure what storms may come." He stated that future generations will look back on this time in history and say that "we carried forth that great gift of freedom and delivered it safely" to them.

  By Paula Cruickshank, CCH News Staff

Tax Analysts report: