Valuation Overturned

/in /by

The U.S. Tax Court has redetermined for estate tax purposes the value of a deceased individual’s two 17th Century “Old Master” paintings. The court rejected the estate’s valuation because it determined that its expert witness stood to gain from providing a lowball estimate, didn’t offer supporting comparables for the valuations, exaggerated the paintings’ dirty condition, and didn’t adequately explain the fact that one painting sold a few years later for almost five times the amount he’d estimated. (TC Memo 2017-40)

Proposed health care bill clears two House committees

/in /by

Following nearly 18 hours of debate, the American Health Care Act (AHCA) was approved by the Ways and Means Committee on March 9 by a 23-16 party line vote. The House Energy and Commerce Committee also approved the bill, which repeals and replaces the Affordable Care Act (ACA), although many ACA provisions will remain under the AHCA. Both parts of the legislation will now go to the House Budget Committee, which is expected to assemble the final bill that will then be voted on by the full chamber.

Taxpayer is on the hook for foreign earned income

/in /by

The U.S. Tax Court held that a taxpayer-contractor who worked in Iraq, providing security for visiting dignitaries, wasn’t entitled to the tax code’s foreign earned income exclusion because his place of abode was the United States. To qualify, a person’s home must be a foreign country. The court also held that his former spouse was entitled to innocent spouse relief under the code, leaving him responsible for all the deficiencies relating to the improperly excluded foreign earned income. (TC Summary Op. 2017-10)