Tax Court Permits Capital Loss, Basis Increase For Real Property

In a recent U.S. Tax Court Memorandum decision, Judge Wherry held that petitioner was entitled to deduct a short-term capital loss based on inability to collect from his business partners on a judgment and to increase his basis in real property with part of his claimed expenditures.  Judge Wherry also held that the petitioner ws liable for the section 6651(a) addition to tax, but on account of reasonable cause was not liable for the section 6662(a) accuracy-related penalty.

See Greenwald v. Comm'r, T.C. Memo. 2011-239 (Oct. 3, 2011).

Posted by William Alan Nelson II, Associate Editor, Wealth Strategies Journal