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Section 167(e)5 provides that no amortization deduction
shall be allowed under any income tax provision for any term
interest in property for any period during which the remainder
interest in such property is held by a related person. The
remainder interests in the trust are held by Laura, Ted, and
Caroline. Laura and Ted are the daughter and son of petitioner.
Caroline is Mr. Jackson's daughter, but she is not petitioner's
daughter.
4(...continued)
sec. 273 applies to disallow the amortization deductions claimed
by petitioner for her life interest in the trust, sec. 167(e)
does not apply to petitioner.
5 SEC. 167(e). Certain Term Interests Not Depreciable.--
(1) In general.--No depreciation deduction shall
be allowed under this section (and no depreciation or
amortization deduction shall be allowed under any other
provision of this subtitle) to the taxpayer for any
term interest in property for any period during which
the remainder interest in such property is held
(directly or indirectly) by a related person.
(2) Coordination with section 273.--This
subsection shall not apply to any term interest to
which section 273 applies.
* * * * * * *
(5) Definitions.--For purposes of this
subsection--
(A) Term interest in property.--The term
"term interest in property" has the meaning given
such term by section 1001(e)(2).
(B) Related person.--The term "related
person" means any person bearing a relationship to
the taxpayer described in subsection (b) or (e) of
section 267.
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Last modified: May 25, 2011