Jack Horner

column TAX MATTERS The Tax Court held that W-2 wages paid by two S corporations that were not deductible under Sec. 280E in computing their taxable income could not be taken into account in calculating the Sec. 199A qualified business income (QBI) deduction of their owners. Facts: The taxpayers, Ayla A. Savage and Patricia A. Torres, co-owned Tru Greenthumb Inc. and Fillabong Inc., both S corporations and cannabis businesses subject to Sec. 280E. Sec.

column TAX MATTERS The Tax Court found that advances made by Anaheim Arena Management LLC (AAM) did not constitute bona fide debt and therefore upheld the IRS’s disallowance of AAM’s bad-debt deduction for the advances. However, the Tax Court denied the IRS’s imposition of an accuracy-related penalty because AAM, in claiming the bad-debt deduction, acted with reasonable cause and in good faith on the advice of its accountants.

column TAX MATTERS The Tax Court applied a narrow definition to Sec. 1234A(1)’s “with respect to property” requirement when considering the character of a corporation’s $1.6 billion deduction of a fee it paid to terminate a proposed merger, holding that it was an ordinary deduction to which Sec. 1234A did not apply.