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Golf-Related Partnership Wrongly Denied $14M in Deductions (1)

Sept. 16, 2019, 8:18 PMUpdated: Sept. 16, 2019, 10:19 PM

A Texas limited partnership was wrongly denied the tax deductions for its for-profit activity, the U.S. Tax Court ruled Sept. 16.

The court held that WP Realty was operating a golf course with the objective to make a profit under tax code Section 183. This meant it could deduct $14,335,598 for activities the IRS had found weren’t deductible for tax years 2011 to 2014.

WP Realty is a Texas limited partnership that owns and is the developer of Whispering Pines Golf Club. It was formed by Corbin Robertson, a limited partner who owned 99% interest in the partnership, along with Olympia Realty Inc., the general partner that owned 1%.

The IRS argued Robertson operated WP Realty for philanthropic purposes.

Robertson initially wanted to create a charitable organization, Judge Kathleen Kerrigan said, partially agreeing with the IRS.

But WP Realty’s “predominant, primary, or principal objective was to realize an economic profit independent of tax savings,” she said.

Judge Kerrigan held that Robertson had the intent to make a profit once WP Realty was created.

“We’re very happy,” said Steven T. Miller, attorney for WP Realty and partner at Zerbe, Miller, Fingeret, Frank and Jadav, LLP.

“The client worked diligently to build a great golf course that would be profitable,” he said.

The IRS didn’t immediately return a request for comment.

The case is WP Realty, LP v. Commissioner, T.C., No. 27213-16, 9/16/19.

(Updated with comment from WP Realty attorney starting in eighth paragraph.)

To contact the reporter on this story: Aysha Bagchi in Washington at

To contact the editors responsible for this story: Patrick Ambrosio at; Patrick L. Gregory at