Veriha v. Comm'r
United States Tax Court
During 2005, P-H was the sole owner of JVT, a C corporation in the trucking business, and he actively participated in JVT's business. JVT leased the tractors and trailers used in its business from TRI, an S corporation in which P-H owned 99% of the shares of stock, and JRV, a single-member LLC in which P-H was the only member. The lease of each tractor and each trailer was governed by a separate contract. During 2005, TRI generated net income and JRV generated a net loss.
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During 2005, P-H was the sole owner of JVT, a C corporation in the trucking business, and he actively participated in JVT's business. JVT leased the tractors and trailers used in its business from TRI, an S corporation in which P-H owned 99% of the shares of stock, and JRV, a single-member LLC in which P-H was the only member. The lease of each tractor and each trailer was governed by a separate contract. During 2005, TRI generated net income and JRV generated a net loss. On their 2005 joint return Ps treated the net income from TRI as passive income and treated the net loss from JRV as a…
1Opinion of the Court
OPINION
WELLS, Judge:
Respondent determined a deficiency in petitioners’ 2005 Federal income tax of $258,785 and an accuracy-related penalty pursuant to section 6662(a) of $51,757.1 Respondent concedes that petitioners are not liable for the penalty. The issue we must decide is whether the income petitioner Joseph Veriha received from an S corporation in which he owned 99% of the stock should be re-characterized as nonpassive income pursuant to section 1.469-2(f)(6), Income Tax Regs, (sometimes referred to as the “self-rental rule or the recharacterization rule”).
Background
The parties submitted…
2Cases cited10 opinions
- Federal Deposit Insurance v. MeyerSupreme Court of the United States · 1994
- Muscarello v. United StatesSupreme Court of the United States · 1998
- Commissioner v. National Alfalfa Dehydrating & Milling Co.Supreme Court of the United States · 1974
- Schwalbach v. CommissionerUnited States Tax Court · 1998
- Schaefer v. CommissionerUnited States Tax Court · 1995
5 more not listed; retrieve them via the Exa API.
3Cited by4 opinions
- Dirico v. Comm'rUnited States Tax Court · 2012
- Dirico v. Comm'rUnited States Tax Court · 2012
- Francis J. Dirico and Jennifer Dirico v. CommissionerUnited States Tax Court · 2012
- Veriha v. Comm'rUnited States Tax Court · 2012