Jeff Quinn


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July 1, 2013
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Revenooer Rants: ‘Fat tax’ notion picks up again

So here comes the tax increase community, with yet another suggestion regarding ways in which the government can raise some more dough — the National Bureau of Economic Research is out with a working paper suggesting that raising the price of a calorie for home consumption by 10 percent just may reduce the percentage of body fat in youth by 8 or 9 percent!

“An increase in the price of a calorie regardless of its source would improve obesity outcomes,” notes the working paper.

And says Abigail Okrent, an Agriculture Department researcher, when comparing a fat tax, a sugar tax, a calorie tax and a general food tax, “A calorie tax would get you the biggest bang for the buck; it’s the most direct way of taxing obesity.”

And speaking of pigs getting fat, while hogs get slaughtered, consider the recent decision of the Tax Court in a case where the taxpayer tried to push the like-kind exchange rules just a bit too far, in attempting to defer taxation.

The IRS regulations say that “like kind” refers to the nature or character of the property, not its grade or quality. One kind or class of property may not be exchanged for property of a different kind or class.

The fact that any real estate involved is improved or unimproved is not material, because that factor relates only to the grade or quality of the property and not to its kind or class.

And specifically, the regulations offer examples of like-kind property, including the outright fee interest in real estate to a leasehold of a fee with 30 years or more to run for the real estate.

So here comes VIP’s Industries Inc., which attempted to make the like-kind rules stick in a case of the trade of two real property fee interests, one containing a motel and the other an office building, for a leasehold interest in realty improved by a motel, with a remaining term of 21 years and four months.

“No can do,” said the Court — obviously, 21 years and four months is not 30 years!

VIP had argued the 30-year example in the regulations was merely a “safe harbor,” and not intended to exclude all exchanges of shorter leasehold interests from like-kind exchange treatment.

And finally this week, from our “your government at work” department, comes a personal experience which almost defies description.

Yes, your Washoe County Treasurer (who hemmed and hawed for years before remitting the substantial amounts of dough confiscated from Incline Village property owners, as a result of faulty property tax assessment practices) recently sent to yours truly a check for $0.02 (That’s right - two cents worth!), accompanied by a letter explaining that the “check represents interest income due to you as a result of the correction previously processed on the parcel referenced above.”

The Treasurer’s qualms of conscience may have made more of an impression on this taxpayer had they instead sent the dollar equivalent of the time spent in accounting for this “problem,” writing the letter, and spending the 43 cents in postage.

So much for the incessant bleats of budget problems emanating from the politicians.

CONSULT YOUR TAX ADVISER - This article contains general information about various tax matters. You should consult your CPA regarding the implications to your particular situation. Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno. He can be reached at 831-7288, welcomes comments at jquinn@ashleyquinncpas.com, and invites readers to consider his other commentary at http://blog.nolo.com/taxes.


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Tahoe Daily Tribune Updated Jul 3, 2013 05:43PM Published Jul 1, 2013 04:12PM Copyright 2013 Tahoe Daily Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.