In Uncategorized on 01/14/2020 at 17:17

It was the Black ’08. Any of my readers who were practicing in 2007-2008 will remember those years with a shudder. The lenders, watching the collapse of the credit system, were on a tear. Glenn David Cuthbertson a.k.a. David Cuthbertson and Pamela Cuthbertson, 2020 T. C. Memo. 9, filed 1/14/20, were under the gun, and had to get rid of the golf course they needed for their housing development to sell.

So they set up an intrafamily passthrough roundy-round with daughter, son-in-law and old chum, to sell but not divest, and claim a huge tax loss. They allegedly had real estate counsel, but hopefully he did not engineer the scheme nor draft the documents in support thereof.

Since the scene is South Carolina, who better to tell this tale than that obliging jurist and native son Judge David Gustafson?

Maybe the golf course was sold; maybe only the land under the golf course was sold; maybe the clubhouse on the golf course was leased, or abandoned, or maybe not. Maybe only benefits-and-burdens were transferred (or maybe not). Some notes were sold in package (with no separate stated price for each), but could be individually repurchased. And of course Section 453 installment treatment is invoked for land held as inventory (no, you can’t). And Powell on Real Property gets a chawin’ that even Webster would admire.

And Judge Gustafson’s diss of the subjunctive mood in witness’ testimony is a treat. “The Court finds Mr. M’s testimony–to the extent that it was subjunctive–unpersuasive at best, since it was not informative as to what actually happened, and evasive at worst.” 2020 T. C. Memo. 9, at p. 73. (Name omitted).

I must confess that I stopped short of schadenfreude, although it was a struggle. But you have to read this opinion for the document drafting; clessic (and that’s no typo).

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