- 18 -
valuation of the property, and assessed by assessors, * * *
although privileges may be included in the valuation, it is
considered a property tax.") (emphasis added); see also Polakis
v. Commissioner, 91 T.C. 660, 665 (1988).
We now turn to consider whether SLR may classify the
rollback taxes and attorney's fee as "Other deductions" on line
11 of its Schedule K, or whether the deductions must be treated
by SLR's partners as line 10 deductions related to portfolio
income.
Portfolio income subsumes all gross income, other than
income derived in the ordinary course of a trade or business,
that is attributable to the disposition of property held for
investment. Sec. 469(e)(1)(A)(ii)(II); sec. 1.469-
2T(c)(3)(i)(D), Temporary Income Tax Regs., 53 Fed. Reg. 5713
(Feb. 25, 1988). As stated, petitioner does not dispute that the
income from the sale of the Property is portfolio income.
We have previously quoted section 1.469-2T(d)(4), Temporary
Income Tax Regs., 53 Fed. Reg. 5713 (Feb. 25, 1988), which states
in part that "For purposes of section 469 and regulations
thereunder, an expense * * * is clearly and directly allocable to
portfolio income (within the meaning of paragraph (c)(3)(i) of
this section) if and only if such expense is incurred * * * in
connection with property from which such gross income is
derived." Petitioner has conceded that the $55,003.30 of ad
valorem taxes based on the Property's open-space assessment is
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011