Tax

"Credits are a matter of legislative grace"

The title of this post is a phrase that appears a lot in court cases and quoted often by administrative agencies. It almost always precedes a negative result for the taxpayer in question and conveniently ignored when a positive outcome is required.

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DRD Limitations - Part IV

Plain Language Since the code does not explicitly define the term “directly traceable”, the court had to look elsewhere. The case of Watson v. Ray, 192 F.3d 1153, claims that if no “specific definition of the term is given in the statute itself, court should look to the ordinary common sense meaning of the words.

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DRD Limitations - Part III

Directly Traceable Prong Test Background In Revenue Ruling 88-66, the service examines three fact patterns in order to determine if the each one would fall under the control of §246A. Each of the fact patterns are provided below, followed by the Ruling’s analysis and then an examination of how it applies to the case.

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DRD Limitations - Part II

OBH, Inc. v. Comm. In OBH, Inc. v. Comm., the commissioner tried to assert that OBH, Inc (referred to as Berkshire) used proceeds from a loan to purchase short term stock investments.

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