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Full-Text Articles in Law
The Supreme Court And The Timing Of Deductions For Accrual-Basis Taxpayers, Erik M. Jensen
The Supreme Court And The Timing Of Deductions For Accrual-Basis Taxpayers, Erik M. Jensen
Faculty Publications
This article examines the Supreme Court's two decisions in the late 1980s dealing with the timing of deductions, United States v. Hughes Properties (1986) and United States v. General Dynamics Corp. (1987), and finds those decisions wanting. Indeed, it is hard to understand why the Court exercised its discretionary jurisdiction twice in such a short period when the cases involved technicalities that seemed to overwhelm the generalist justices and when subsequent disputes with similar factual situations would be affected by statutory changes.
Deconstructing The General Plan Of Rehabilitation, John W. Lee
Deconstructing The General Plan Of Rehabilitation, John W. Lee
Faculty Publications
The general plan of rehabilitation doctrine provides that expenses incurred as part of a plan of general rehabilitation must be capitalized even though the same expenses incurred separately would be deductible as ordinary and necessary repairs. The emerging general standard after INDOPCO for current deduction of an expenditure with future benefits, the case with most repair/ improvement expenditures, is a balancing test: Whether the taxpayer ’s administrative and record keeping costs associated with capitalization outweigh the potential distortion of income from a current deduction of the future benefit expenditures. “Rough justice” rules for current deduction of future benefits expenditures, reflecting …
The Supreme Court’S Misleading Footnote In General Dynamics, Erik M. Jensen
The Supreme Court’S Misleading Footnote In General Dynamics, Erik M. Jensen
Faculty Publications
This article examines footnote 3 in the Supreme Court's 1987 opinion in United States v. General Dynamics. In that case, governed by the law in place before the Tax Reform Act of 1984, the Court held that General Dynamics had to defer deductions attributable to claims for employee medical expenses until the claims were approved. In the footnote, the Court suggested that the 1984 amendment to section 461(h) of the Internal Revenue Code postponing the time for deducting accrued expenses until economic performance would, in a similar case governed by the statutory change, have further deferred General Dynamics' deduction until …