Earlier this year, a New York City Administrative Law Judge found that the taxpayers’ sale of a tenancy-in-common (“TIC”) interest in real estate qualified for section 1031 “like-kind exchange” treatment even though the underlying property had been owned that very same day by a partnership, which distributed the
Unsuccessful Taxpayer Change in Domicile from New York to Florida Shows that Courts will Follow the Money
By Laura Gavioli & Lylah Paine on
Snowbirds, take notice. In October 2025, the New York State Tax Appeals Tribunal issued a decision regarding a couple’s claimed change in domicile from New York to Florida for the 2018 and 2019 tax years. Matter of Hoff and Ocorr-Hoff, DTA No. 850209 (N.Y.S. Tax Appeals Trib. Oct. 9, 2025)…
Proposed Regulations Remove Look-Through Rule for Domestically Controlled REITs
I. Introduction
On October 20, 2025, the U.S. Department of the Treasury (“Treasury”) and the Internal Revenue Service (the “IRS”) issued proposed regulations (the “Proposed Regulations”) that would helpfully revoke the current “look-through rule” for domestic C corporation shareholders to determine whether a “real…
California’s Franchise Tax Board Adopts Final Regulations for Market-Based Sourcing
On September 10, 2025, California’s Franchise Tax Board (“FTB”) adopted final regulations (“Final Regulations”) amending the rules regarding market-based sourcing for sales other than sales of tangible personal property. This brings to an end the FTB’s long-running process toward formally adopting the amendments first approved in…
FICA Tax: Navigating the Nonqualified Deferred Compensation Special Timing Rule
By Tyler Forni, David B. Teigman & Andrea S. Rattner on
Compensation is generally subject to federal income tax and FICA tax when compensation is actually paid to an employee. However, nonqualified deferred compensation (NQDC) may be subject to FICA taxation before federal income taxation under a FICA tax special timing rule. The scope of NQDC subject to FICA taxation is…
Eighth Circuit Affirms Mayo Clinic’s “Educational Organization” Status and UBTI Refund
On July 25, 2025, the U.S. Court of Appeals for the Eighth Circuit affirmed the District Court decision holding that the Mayo Clinic is entitled to an $11.5 million refund of certain unrelated business income taxes imposed on it due to it being an “educational organization” under section 170(b)(1)(A)(ii).[1]…
President Trump Signs One Big Beautiful Bill Act into Law
I. Introduction
On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (the “Act”) into law.[1] The Act is similar to the Senate Finance Committee’s draft legislative text (the “SFC Bill”) (released on June 16, 2025), with several modifications and omissions. The Act’s key differences from…
Tax Court Breaks New Ground on the Deductibility of Termination Fees with AbbVie Ruling
On June 17, 2025, the Tax Court opinion in AbbVie Inc. and Subsidiaries v. Commissioner of Internal Revenue was issued,[1] holding that the approximately $1.6 billion termination fee AbbVie (a Delaware corporation) paid to its abandoned merger partner Shire plc (an Irish company) was properly an ordinary deductible business…
The Tax Court in Soroban Holds that Limited Partners Were Too Active To Be Treated As “Limited Partners” and are Subject to Self-Employment Tax
On May 28, 2025, in Soroban Capital Partners LP v. Commissioner (T.C. Memo 2025-52) (“Soroban II”), the Tax Court held the active role of limited partners in a fund manager caused them to fail to qualify as “limited partners” for purposes of section 1402(a)(13) and, therefore, the limited…
One Big Beautiful Bill: Update on Provisions for Nonprofits
On May 22, 2025, the House of Representatives passed the One Big Beautiful Bill Act (H.R. 1, hereafter the “Revised House Bill”). The Revised House Draft Bill contains certain changes to the original bill that was released on May 12, 2025 by the House Ways and Means Committee (the “Original House Draft…