Category Archives: Court Rulings

Recent Developments May Affect Passive Investors with Losses

May 10, 2017 | Court Rulings, Financial Planning, IRS Regulation, Tax Planning, Tax Preparation

Are you a passive investor who isn’t directly involved in a project’s day-to-day operations, or do you materially participate in a business or rental activity in Maine? To help individuals classify income, gains and losses from activities as passive or nonpassive, the IRS has prescribed seven tests. The passive activity loss (PAL) rules have been around  Continue Reading »

Daubert: It’s About Reliability of Testimony, Not Power of Persuasion

May 5, 2017 | Court Rulings, Valuations

Post-Confirmation Comm. for Small Loans, Inc. v. Martin, 2016 U.S. Dist. LEXIS 44270 (March 31, 2016) A recent ruling in a complex bankruptcy case teaches that Daubert can accommodate differing views on determining solvency for multiple debtor entities. Consolidated vs. stand-alone basis A group of related family-run consumer lending and retail businesses filed for Chapter  Continue Reading »

The Ins and Outs of Deducting Legal Expenses

May 1, 2017 | Court Rulings, IRS Regulation, Tax Planning, Tax Preparation, Valuations

Currently under the federal income tax rules, legal expenses incurred by individuals are typically not deductible. Instead, they’re most often treated as either part of the cost of acquiring an asset, such as real estate, or as personal outlays (which are nondeductible). In the acquiring asset situation, legal costs usually aren’t deductible right away; instead, they  Continue Reading »

Tax Court Interprets Exceptions to the PAL Rules for Rental Properties

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

Due to depreciation write-offs and other allowable deductions, Maine real estate owners who rent their properties often incur tax losses. However, the ability to deduct those losses might be postponed indefinitely by the passive activity loss (PAL) rules. In general, these rules limit deductions for rental property PALs to the amount of income that you have  Continue Reading »

‘Persuasive’ Defense Expert Testimony Defeats ESOP Overpayment Claims

April 21, 2017 | Court Rulings, Valuations

Fish v. Greatbanc Trust Co., 2016 U.S. Dist. LEXIS 137351 (Sept. 1, 2016) In an important ESOP decision, the court dismissed claims that the defendants had committed breaches of fiduciary duty and engaged in a prohibited transaction. The case turned on the soundness of the fairness and valuation opinions a nationally recognized valuation firm had  Continue Reading »

Court Digs Through Appreciation Issues in Complex Divorce Case

April 12, 2017 | Court Rulings, Divorce Litigation, Valuations

Kminek-Nierenberg v. Kenneth Nierenberg, 2016 N.J. Super. Unpub. LEXIS 2015 (Sept. 8, 2016) A complex New Jersey divorce litigation with multiple defendants and several family businesses illustrates the challenges appraisers and the trial court faced in determining the appreciated value of numerous separate premarital and gifted assets for equitable distribution purposes. The case highlights basic  Continue Reading »

When Can You Deduct Theft Losses?

April 3, 2017 | Court Rulings, Deductions, Fraud Prevention, Tax Planning, Tax Preparation

Your personal losses resulting from casualties and thefts are allowed to be deducted by the tax law, within certain limits. And a “theft” for tax purposes isn’t strictly limited to house burglaries or stolen cars. However, as you will see from several U.S. Tax Court cases, the deduction can hinge on the application of state  Continue Reading »

Sound Valuation Report Keeps Expert Alive in Daubert Fight

March 29, 2017 | Court Rulings, Fraud Prevention, Valuations

MSKP Oak Grove, LLC v. Venuto, 2016 U.S. Dist. LEXIS 84950 (June 29, 2016) A recent fraud case illustrates how a thorough expert report can help an embattled valuator stay the course even in the tumult of litigation. The key is to document everything. Need for reverse engineering Four defendants sold their tanning salon franchise  Continue Reading »

Unilateral Partnership Dissolution Exacts Steep Price from Wrongdoer

March 10, 2017 | Court Rulings, Valuations

Congel v Malfitano, 2016 N.Y. App. Div. LEXIS 3706 (May 18, 2016) What a difference a word makes. That’s the lesson from a recent New York appellate ruling in a dispute in which a minority shareholder was found liable of wrongfully breaching the partnership agreement to secure a high price in the buyout of his  Continue Reading »

Valuation Issues in Divorce

March 3, 2017 | Court Rulings, Divorce Litigation, Valuations

Divorce is one of the most common reasons for obtaining a business valuation, and has led to many court decisions. Throughout the United States, there are a myriad of laws and case law, and making sense of this patchwork quilt is difficult at best. When developing a valuation for a marital dissolution, here are some  Continue Reading »