Heather P. Dunn and Edison Dunn v. Comm’r |T.C. Memo 2022-112 | November 29, 2022 | Wells, J. | Dkt. No. , No. 9996-17
Short Summary: At issue in this case are several deductions that the taxpayers claimed – including depreciation and certain losses from passthrough of their wholly-owned corporation. Unfortunately, the taxpayers in this case failed to maintain sufficient documentation and failed to satisfy multiple rules that would have allowed them to claim such deductions. As a result, the deductions were denied, and accuracy-related penalties were sustained.
Key Issues:
- Whether the taxpayers were entitled to a depreciation deduction on the wife’s Ford Explorer;
- Whether the taxpayers were entitled to a deduction of certain net losses; and
- Whether the taxpayers were entitled to deduct flowthrough losses from an entity they owned, Magnet Development LLC.
- Whether the taxpayers were properly assessed accuracy-related penalties.
Facts and Primary Holdings:
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