Attorney-at-Law

THE RIGHT STOUGH?

In Uncategorized on 06/04/2015 at 18:41

No, this is not a misspelling of the 1979 Tom Wolfe docudrama about rocket flight. It may, however, be a mispronunciation of the surnames of Michael H. Stough and Barbara M. Stough, the stars of my blogpost “Another Good Dodge Gone Wrong,” 6/2/15. If so, I do apologize.

But Judge Ruwe’s arithmetic so befuddled me that I must shed my cloak of omniscience, albeit reluctantly, and call for help.

I tried speaking to the Stoughs’ counsel, Stanley L. Ruby, Esq., the highly-credentialed partner at Schwartz Manes Ruby & Slovin, of Cincinnati, OH who represented Mike and Barb, but he didn’t return my phonecall.

So I must send out the word into the blogosphere, begging for assistance.

What does this mean, in simple English?

“The lease entered into between T and [Owner] does not provide for prepaid rent. First, it is necessary to determine ‘the cumulative amount of rent payable as of the close of * * * [the] calendar year’. In 2008 T paid rent to [Owner] totaling $1,151,493.18 ($151,493.18 of monthly rent for the plasma collection center and a $1 million lump-sum payment pursuant to section 4.1(a)(v) of the lease). Therefore, the cumulative amount of rent payable by T as of the close of the 2008 calendar year is $1,151,493.18. Second, it is necessary to ascertain ‘the cumulative amount of rent allocated as of the close of the succeeding calendar year’ (i.e., 2009). As previously held, the lease at issue does not specifically allocate fixed rent to any rental period within the meaning of section 1.467-1(c)(2)(ii)(A), Income Tax Regs. In the absence of a specific allocation, the amount allocated to each year is the amount payable for each rental period. Sec. 1.467-1(c)(2)(ii)(B), Income Tax Regs. Although the record before us does not include the exact amount of rent payable by T for the 2009 calendar year, T did have rent payable during 2009 based on the mathematical formula contained in the lease. It follows logically that the cumulative amount of rent payable as of the close of 2008 ($1,151,493.18) will not exceed the cumulative amount of rent allocated as of the close of 2009 ($1,151,493.18 plus rent payable during 2009). Accordingly, the section 467 rental agreement does not have prepaid rent pursuant to section 1.467-1(c)(3)(ii), Income Tax Regs.” 144 T. C. 16, at pp. 23-24.

No prize for the correct answer.

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