economic substance doctrine

The Passive Loss Rules

In general, if a taxpayer’s aggregate losses from passive activities exceed the taxpayer’s aggregate income from passive activities for the taxable year, the excess losses may not be deducted against other income for that taxable year. Such excess losses are suspended and are carried forward, to be treated as deductions from

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The Bigger Picture

In addition to the SCIN-specific issues, the complaint touches on a number of themes of which every estate-planning adviser – and every client – should be aware.

The Facts Matter

An adviser should assume that the IRS will scrutinize the estate plan

Related parties, be they family members or commonly-controlled business entities, must be careful when transacting business with one another.  They, and their advisers, must recognize that these transactions will be subject to close scrutiny by the IRS. The parties must treat each other, as much as possible, as unrelated persons, and they must be able

A taxpayer has the legal right to minimize his or her taxes, or to avoid them completely, by any means that the law allows. However, this right does not give the taxpayer the right to structure his or her affairs by using “business entities” that have no economic reality and that are employed only to