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Sierra Club V. Commissioner And The Royalty Exemption To The Unrelated Business Income Tax: How Much Activity Is Too Much?, Katherine A. Vanye
Sierra Club V. Commissioner And The Royalty Exemption To The Unrelated Business Income Tax: How Much Activity Is Too Much?, Katherine A. Vanye
Washington Law Review
In Sierra Club v. Commissioner, the Ninth Circuit decided that royalties are payments for the right to use intangible property and are by definition "passive." The court applied this definition and held that Sierra Club's income from renting its mailing list was a royalty payment and thus exempt from taxation. This Note argues that while the court reached the correct conclusion, it did not propose a clear standard to guide future cases. Two alternative approaches could be adopted: (1) ancillary versus significant services; or (2) comparative value of property and services. These alternatives will provide clearer guidelines and enable …
Kochanksky V. Commissioner: The Assignment Of Income Doctrine, Community Property Law, And I.R.C. § 1041, Sarah Dods
Kochanksky V. Commissioner: The Assignment Of Income Doctrine, Community Property Law, And I.R.C. § 1041, Sarah Dods
Washington Law Review
In Kochansky v. Commissioner, the Ninth Circuit held that an attorney was fully taxable on a contingent fee he agreed to split with his spouse at divorce, reasoning that the assignment of income doctrine requires that income be taxed to the person who earns it. This Note observes that in applying the assignment doctrine, the Kochansky court erred by failing to determine the extent of the spouse's community property interest in the contingent fee; community property income must be taxed one-half to each spouse, regardless of which spouse earns it, which spouse collects it, and when it is collected. …