Holding to sell undeveloped lots results in capital gain even though development restarted

Article Abstract:

The author discusses the Tax Court 1999 memorandum case Olstein which concerned the issue of capital gains versus ordinary income treatment of a developers' real property lots after several financial and contractual problems. The developer's intent was relevant to the court's finding in his favor.

Tax Rates, Real estate developers

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Wisconsin appeals court finds sales of "flexible" time-share condominiums subject to sales tax

Article Abstract:

A Wisconsin appellate court in Telemark Development v. Wisconsin Department of Revenue held that sales tax was properly applied to sales of time-share condominium units which were divided into flexible use weekly time periods. Since the buyers would have to reserve their units pursuant to formal condominium rules, the court applied the sales tax statute applicable to transient lodgings. The lesson to be gained from the result in this case is one learned early on in law school: drafting of legal documents should anticipate future problematic issues.

Wisconsin, Sales tax, Timesharing (Real estate), Timeshares (Real estate), Condominiums

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Ninth Circuit holds unintended beneficiary may qualify for another's targeted grandfather rule

Article Abstract:

The US 9th Circuit Court of Appeals in Airborne Freight Corp. v. United States held that the IRS was incorrect in too narrowly limiting the benefits of grandfathered rulings originally drafted with specific taxpayers' specific projects in mind. The court found that taxpayers meeting the requirements of generalized transition rules concerning the investment tax credit should be entitled to the benefits of those rules.

Influence, Tax reform, Tax incidence

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