Category Archives: Court Rulings

Hockey Team’s Meals at Away Games Were a De Minimis Fringe Benefit

July 24, 2017 | Court Rulings, IRS Regulation, Tax Planning, Tax Preparation

Recently, it was ruled by the U.S. Tax Court that the Boston Bruins hockey team’s pregame meals to players and personnel at out-of-town hotels qualified as a de minimis fringe benefit under the Internal Revenue Code. Therefore, 100% of the cost of those meals could be deducted, and it wasn’t subject to the 50% tax  Continue Reading »

Court Deems Future Lost Profits Formula an Exercise in Speculation

June 30, 2017 | Court Rulings, Valuations

Mattress Closeout Ctr. IV, LLC v. Panera, LLC, 2016 U.S. Dist. LEXIS 91881 (July 15, 2016) Courts are not looking to experts for creative ways to calculate damages. They want a calculation based on reasonable certainty. In a recent case, the court decided to throw out most of the plaintiff’s damages claims before the case  Continue Reading »

Reclassifying Business Expenses as Constructive Dividends

June 21, 2017 | Court Rulings, Deductions, IRS Regulation, Tax Planning, Tax Preparation

In order to deduct an expense as a business expense, it must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business, and a necessary expense is one that’s helpful and appropriate for your business. There are times when the IRS will challenge deductions claimed for  Continue Reading »

Court Disapproves of Nonexpert Valuation of Key Marital Asset

June 16, 2017 | Court Rulings, Divorce Litigation, Valuations

Lacoste v. Lacoste, 2016 Miss. App. LEXIS 460 (July 19, 2016)  A recent Mississippi divorce case highlights the complexity of valuing a small family business as well as the importance of an accurate valuation to achieving an equitable distribution of marital assets. Neither party in the case retained an expert, prompting the trial court to  Continue Reading »

Are Contingent Attorneys’ Fees Tax Deductible?

June 12, 2017 | Court Rulings, IRS Regulation

You may be wondering whether the expense of a contingent-fee arrangement with your attorney is deductible for federal income tax purposes. Unfortunately, the guidance on this controversial issue isn’t favorable to taxpayers in most situations. The federal income tax treatment of contingent fees paid to an attorney out of a taxable non-business judgment or settlement  Continue Reading »

Chancery Achieves Fair Value by Blending Three ‘Imperfect Techniques’

June 7, 2017 | Court Rulings, Valuations

In re DFC Global Corp., 2016 Del. Ch. LEXIS 103 (July 8, 2016) A recent fair value decision from the Delaware Court of Chancery turned on the idea of uncertainty. Impending regulatory changes in key markets made it hard to predict the company’s future performance. Shaky forecasts raised doubts about the reliability of the results  Continue Reading »

Capital vs. Ordinary: Classifying Income and Losses Affects Your Taxes

May 26, 2017 | Court Rulings, IRS Regulation, Tax Planning, Tax Preparation, Valuations

How to classify gains and losses from selling an asset in Maine is fairly straightforward most of the time. However, there are some gray areas that require a closer look at the facts and circumstances, especially when real estate is involved, as a couple of recent cases demonstrate. Why It Matters Distinguishing between capital and  Continue Reading »

‘Dramatic’ Valuation Adjustment Justifies Equity Committee

May 19, 2017 | Court Rulings, Valuations

In re Horsehead Holding Corp., 2016 Bankr. LEXIS 3187 (May 2, 2016) Shareholders in a bankrupt company rarely get to form an equity committee that represents their interests during the reorganization proceedings. But, in an extraordinary bankruptcy case, the court, after hearing shareholders express concern over the valuations of the company, ordered the formation of  Continue Reading »

Employer Can Have Info about Whether Misclassified Workers Paid Tax

May 15, 2017 | Business Plans, Court Rulings, IRS Regulation, Tax Planning, Tax Preparation

Recently, the U.S. Tax Court ruled that federal law doesn’t prohibit an employer from receiving information on whether workers paid tax on the income when the employer is looking reduce its tax liability on misclassified workers. Background on the Ruling In order to lower costs and administrative burdens, businesses often prefer to treat workers as independent  Continue Reading »

Establishing Maine Residency for State Tax Purposes

May 12, 2017 | Court Rulings, Tax Planning, Tax Preparation

If you’re considering moving yourself or your business to Maine and making it your permanent home, you’ll want to make sure to establish that the new state is your place of legal residency (also known as your “domicile”) for state tax purposes. Otherwise, the old state could come after you for taxes after you’ve moved.  Continue Reading »