In Uncategorized on 06/08/2022 at 17:30

This phrase guarantees the removal of all persons within earshot of the speaker at a speed that exceeds any theoretical maximum calculated by Albert Einstein or Max Planck. Lest my diminishing circle of readers be further diminished, I hasten to state that I will not do so. It was only the mention of the homeplace of William E. Musselwhite, Jr. and Melissa Musselwhite, T. C. Memo. 2022-57, filed 6/8/22, that brought back memories of Lumberton, NC, the local hospital and its doctor transplanted from Brooklyn, Medevac Barbie and her coadjutors, the dash through the night with sirens wailing, and the holdover eviction petition I drafted in the recovery room at Duke University Hospital.

Bill’s story is much less instructive or amusing. Bill was doing great in his dad’s law office, so he branched out into real estate. Like ever so many of his contemporaries and mine, Bill got hit in The Black ’08.

Judge Tamara Ashford finds Bill was not in the business of real estate development, so his million-dollar ordinary loss claim transmutes into the capital loss IRS says it is.

Judge Ashford does the obligatory factorial trudge through the eight (count ’em, eight) essentials 4 Cir has decreed are needed to winnow the capital from the ordinary. Bill loses one through six, both inclusive, but scores on seven and eight (brokers and advertising).

That doesn’t help, though, as Bill performs a classic own-goal. “Mr. Musselwhite testified that all the things he and Mr. S were doing through DS & EM Investments were ‘really investment’ and that specifically with respect to DS & EM Investments’ acquisition of the four lots, it was an opportunity to invest in a subdivision that Mr. L (who was an established developer) was already developing (as the owner of the other five lots in the subdivision). His testimony is consistent with the representations made on (1) DS & EM Investments’ 2005–12 Forms 1065 that its principal business activity was ‘INVESTMENT’ and (2) DS & EM Investments’ 2005–12 LLC reports that its business was real estate investment.” T. C. Memo. 2022-57, at p. 12. (Names omitted).

With that testimony, I am sure Bill’s trusty attorney followed the advice of that great trial lawyer, the late Henry Miller, and smiled her sweetest smile (and her LinkedIn profile shows she has a very sweet smile), as if that was exactly what she wanted to hear, and went out into the hallway and sobbed.


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