Agreement made, taxpayer lessee, not owner

Article Abstract:

Ownership interest is an essential requirement for taxpayers to avail of deductions in mortgage interest payments for property in cases where an agreement is made to share future earnings from the sale of the said property. In the case of Swaffer, TCM 1992-180, it was shown that the taxpayer had no such ownership interest in residential property for which there was a profit-sharing agreement. The court ruling was that there was insufficient indication in the agreement concerning the taxpayer's rights as owners selling property. Other bases for the court decision were the lack of a clear statement on purchase price, interest rate or restrictions on the sale of the property, as well as the outcome of the proceeds.

Cases, Tenants, Real property tax, Real property taxes

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Rental losses deductible even if gain on sale of principal residence is deferred

Article Abstract:

A recent decision by the Ninth Circuit Court has held that taxpayers may deduct the expenses of temporarily renting a home despite the fact that they were able to defer gain on the sale of the residence (their principle residence) under Section 1034. The implications of the decision are analyzed, and the two principle questions raised by the decision are discussed: whether the rented house has become income-producing property (which would disqualify it for the deferral of gain realized on its eventual sale under Section 1034), and whether taxpayers can deduct rental expenses (depreciation, insurance and maintenance) without the limitations Section 183 imposes.

Analysis, Tax administration and procedure, Tax administration, Rental housing, Property tax credit, Personal property taxes

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Legal title not necessary for rollover

Article Abstract:

The Court of Appeals for the Fourth Circuit has ruled in favor of a lessee who sold a commercial property that was also used as a principal residence and has allowed him to claim part of the proceeds attributable to the residential use of the property. The Fourth Circuit ruled that the IRS's assertion that there had been no sale since the lessee did not own the land was invalid. The court ruled that while the lessee did not have legal title to the property, he was eligible to claim under the rollover provisons of Section 1034 of the Internal Revenue Code.

Courts, Rollovers (Finance), United States. Court of Appeals for the 4th Circuit

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