U.S. Tax Court Memorandum Decision Upholds IRS Deficiency Ruling, Penalty on Unreported Property Sale Gains

The U.S. Tax Court, in a memorandum decision, held that the taxpayer was liable for tax on gains from the sale of two properties and an accuracy-related penalty, partially granting the IRS’s deficiency determination. Taxpayer, an individual, sold two properties in 2020 but did not report the gains on his tax return. The IRS issued a notice of deficiency determining a deficiency and an accuracy-related penalty. The court held that the taxpayer had a taxable gain on the sale of the first property, allowing an estimate of capital improvement expenses under the Cohan rule. For the second property, the court ...