|
Airplane-Related Expenses Not Associated with Trade or Business,
and Tax Deductions Were Disallowed In US Tax Court Case
Courtesy of
http://tax.cchgroup.com
January, 2009. An individual taxpayer could not deduct expenses associated
with his ownership of an airplane on Schedule C because none of the
activities related to the airplane was a trade or business. The individual
was not involved in the trade or business of environmental consulting in one
of the years at issue because he did not establish that he engaged in
related activities with the required continuity and regularity. Furthermore,
expenses incurred by the individual with respect to aircraft maintenance
activity in one year and in environmental aviation activity in the
subsequent year were not deductible. The individual was not engaged in
either activity as a trade or business because his primary purpose for
engaging in the activities was not income or profit. His recordkeeping was
disorganized and unreliable, he could not have an expectation that assets
used in the activity would appreciate, he could not have had a good-faith
expectation of realizing a profit on his operation, he introduced no
evidence regarding the financial performance of his aircraft maintenance
activity for previous years or evidence regarding occasional profits, and
the individual's full-time job allowed the individual to conduct the
aircraft maintenance activity at a loss. Thus, the individual's allowable
deductions were limited under Code Sec. 183(b)(2) to his gross income from
the activity.
The Code Sec. 6662(b)(2) accuracy-related penalty was imposed with respect
to both years at issue. The taxpayer did not contend that he was not
negligent, that he had reasonable cause or that he acted in good faith.
R.L.
Rowden, TC Memo. 2009-41, Dec. 57,744(M)
Guernsey-UK-Tax-Exchange
[Home] [Up] [Australian-Tax-Dodge-Advice] [High-Taxes-Drive-Rich-To-Move] [Little-Known-USA-Tax-Savers] [New-IRS-Appeal-Programs] [Tax-Breaks-Financial-Bailout] [Castroneves-Indicted-Tax-Evasion] [Business-Tax-Breaks-2008] [Avoid-Scams-Mentioning-IRS] [US-Seeks-Foreign-Bank-Account-Holders] [Economic-Stimulus-Deadline] [2008-2009-US-Research-Tax-Credit] [IRS-Audit-Risk] [Car-Mileage-Deduction-2009] [National-Taxpayer-Advocate-2008-Report] [Natural-Disaster-Tax-Relief] [States-Offer-Tax-Breaks-New-Jobs] [Car-Purchase-Tax-Credit-2009] [Business-Deductions-Disallowed] [First-Time-Home-Buyer-Tax-Break] [UBS-Client-Tax-Conviction]
|