U.S. Tax Court Memorandum Decision Partially Upholds Taxpayer’s Business Expense Deductions

The U.S. Tax Court, in a memorandum decision, held that the taxpayers’ software development and most of their home construction activities were engaged in for profit, allowing deductions for business expenses to the extent substantiated. Taxpayers, a married couple with self-taught knowledge and extensive experience in various fields, operated multiple ventures through their LLC, including developing an application addressing internet addiction, constructing homes on a large rural property, and briefly running a mulching business. The taxpayers filed petitions seeking redetermination of deficiencies in federal income tax for 2017-2019 after the IRS disallowed their claimed business expense deductions. The court held ...