Attorney-at-Law

“MADNESS IN HIS METHOD”?

In Uncategorized on 04/06/2016 at 14:33

Actually, the title should be “Madness in Her Method,” as the issue in Walter J. Antonyshyn & Georgiana L. Antonyshyn, Docket No. 21526-14L, filed 4/6/16, is whether Georgi is a Section 469(c) real estate professional, and whether that is a change in accounting method.

I twisted the Bard’s famous line because Georgi is claiming that, even though she had two previous chances to establish her professionalism for two previously-disputed tax years [A and B], she gets another swing for two currently-disputed tax years [X and Y], because if she can prove her Section 469(c) pro-hood, Section 481 lets her revise the two barred years based on a change in accounting method.

I give Georgi’s attorney a Taishoff “Good Try, Second Class.”

Much less generously, Judge Morrison blows up that one.

“The Antonyshyns’ theory that Georgiana is a real estate professional in [X and Y] is on its face a challenge to the amount of their tax liabilities by (sic) [A and B] because, in their words, the theory ‘would reduce the liability to $0.’ The Antonyshyns’ theory is barred by section 6330(c)(2)(B). Even if section 481 could override section 6330(c)(2)(B) in this respect, we fail to see how the resolution of the deficiency case for [X and Y] would trigger a section-481 adjustment with regard to [A and B]. Section 481(a) requires an adjustment to the taxpayer’s taxable income for a taxable year if the taxable income in that taxable year is computed under a method of accounting different from that employed in the prior year. The Anthonyshyns seem to be contending that it would be a change in the method of accounting if Georgiana were treated as a real estate professional in [X and Y]. Even if contention is true, the resulting section-481(a) adjustment should be made in the year of the change [X], not in the prior years [A and B]. Furthermore, treating Georgiana as a real estate professional is not a change in a method of accounting. A change in the underlying facts is not a change in the method of accounting. See Treas. Reg. § 1.446-1(e)(2)(ii)(b) (‘A change in the method of accounting also does not include a change in treatment resulting from a change in underlying facts.’). The question of whether Georgiana is a real-estate professional is a factual issue that is determined on a year-by-year basis. If she is a real-estate professional for [X and Y], that would not affect the question of whether she is a real-estate professional for [A and B].” Order, at pp. 3-4.

I love this stuff, I really do.

 

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: