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Abstract: 

This note considers some recent developments on a number of issues relevant to investors: the meaning of the term “trade or business” for tax purposes; the effect of the all-events test on the timing of deductions; the application of the wash-sale rules to redemptions of shares in money-market funds; the circumstances under which Internal Revenue Code Section 1341 might provide relief to a taxpayer who has taken an item under a claim of right but then has to surrender it; the economic substance doctrine; capitalization versus current deductibility; what constitutes a constructive dividend from a closely held corporation; when an S corporation shareholder gets basis attributable to borrowing by the corporation; and the effect on the charitable contribution deduction if a would-be contributor attaches conditions to the “contribution.”

Keywords: trade or business, all-events test, wash-sale rules, IRC Sec. 1341, economic substance doctrine, capitalization, constructive dividends, S corporation shareholder, charitable deductions

Affiliations:  1: Journal of Taxation of Investments.