April 2012 archive

Supreme Court limits IRS audit period

In United States vs. Home Concrete & Supply, LLC (No. 11–139, Decided April 25, 2012), the U.S. Supreme Court affirmed a three year statute of limitations for audits involving a common tax shelter issue. The Court’s summarized the issue as follows: Ordinarily, the Government must assess a deficiency against a tax¬payer within “3 years after …

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Keystone Pipeline is good example of unintended economic consequences

Sociologist Robert K. Merton popularized the concept of unintended consequences through his 1936 paper, “The Unanticipated Consequences of Purposive Social Action”. Economists study unintended consequences that occur whenever one attempts to regulate or control activity through economic incentives that conflict with market forces. An example involves the Keystone Pipeline, which continues to face regulatory challenges …

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Cloud Storage Terms of Service Compared

Google’s recent announcement that they were beginning their own Cloud Storage service called Google Drive triggered a storm of warnings from privacy advocates regarding the rights that Google was asserting for itself.  The worry was that by simply storing the file on Google Cloud, authors would be turning over full intellectual property rights to Google. …

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Filmmaker wins key victory in deducting losses

In T.C. Memo 2012-115 (April 19, 2012), a taxpayer won a notable tax case involving the hobby loss rules. The Tax Court framed the issue as follows:  We must decide whether petitioner’s documentary film production activity was a trade or business or a labor of love. Respondent asserts that Smile ‘Til It Hurts was the …

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Permanent link to this article: https://betweenthenumbers.net/2012/04/filmmaker-wins-key-victory-in-deducting-losses/

A massive sample size should invite a critical eye, not instill confidence

This post is part of a series that considers methodological and reporting flaws that frequently arise in surveys, and uses Travelandleisure.com’s “America’s Favorites Cities” (AFC) survey as its primary point of discussion. Links to other posts in this series are featured on the author’s page. Reports will frequently boast a survey’s sample size, as if …

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Specific Language is Important in Agreements

A Manhattan Judge dismissed a lawsuit brought by Howard Stern again Sirius XM Radio Inc.  The lawsuit centered around Stern’s claim that the company owed him stock awards for helping Sirius achieve specific subscriber counts.  Stern claims he was owed $300 million and his agent, Don Buchwald, an additional $30 million in stock.  Stern’s original …

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Over $30 Million Allegedly Misappropriated from City Funds

Rita Crundwell, longtime comptroller of Dixon, Illinois, is alleged to have defrauded the city of over $3 million in the last few months and misappropriated $30 million over the last six years.  The town of Dixon is small, with a population of under 16,000. Crundwell lived a luxurious lifestyle that exceeded her $80,000 annual income.  …

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Ignore Investments that Rely On the JOBS Act’s Loosened Requirements

With President Obama’s signature, the Jumpstart Our Business Startups Act, also known as the JOBS Act, is now law. The law raced through Congress with bipartisan support. Practically every investor advocate and investment regulator is aghast. In this article, we explain cost of capital, and how this might (or might not) be impacted by the …

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Internet Advertising Taking Over

The Interactive Advertising Bureau (an industry group) and PricewaterhouseCoopers released their quarterly survey regarding Internet advertising revenues.  The report indicates that the U.S. recorded a record $31 billion in Internet ad revenues for 2011.  This was up 22% from 2010’s $26 billion spent on Internet ads. Approximately half of the Internet ad revenues come from …

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AOL Surprise Sale Shows the Value of Mapping Technology

AOL recently announced the sale of over 800 patents and patent applications to Microsoft, and a non-exclusive license covering the rest of its retained patent portfolio. The sale price is $1.056 billion in cash. The sale includes the stock of an AOL subsidiary, which allows AOL to offset the patent sales against a loss involving …

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