Summarizing Practice

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Summarizing Practice

• A key part of writing research memos
• Also see Reminders on Presenting Your Own Work
  (on 223A Website)

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Rev. Rul. 92-161992-1 CB 15
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Full text - Facts

• Title IV of the Clean Air Act Amendments of
  1990, 42 U.S.C. section 7651 et seq., establishes
  a program of sulfur dioxide emission allowances
  to be allocated annually to certain electricity
  generating companies (utilities) commencing in
  1995. This program will be administered by the
  Environmental Protection Agency.

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Full text - Holding

• The allocation of emission allowances by the
  Environmental Protection Agency and their receipt
  by a utility pursuant to 42 U.S.C. section 7651b
  (a) does not cause the utility to realize gross
  income under section 61 of the Internal Revenue
  Code. Accordingly, under section 1012 of the
  Code, a utility's basis in those emission
  allowances is not measured by reference to the
  fair market value of the allowances.

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What should go into a summary of Rev Rul 92-16?

• Write a summary with a classmate.

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IRC 163(h)(1) (2)

• (h) Disallowance of deduction for personal
  interest.
• (1) In general. In the case of a taxpayer other
  than a corporation, no deduction shall be allowed
  under this chapter for personal interest paid or
  accrued during the taxable year.

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163(h)(2)

• (h) (2) Personal interest. For purposes of this
  subsection, the term personal interest means
  any interest allowable as a deduction under this
  chapter other than
• (A) interest paid or accrued on indebtedness
  properly allocable to a trade or business (other
  than the trade or business of performing services
  as an employee),
• (B) any investment interest (within the meaning
  of subsection (d)),
• (C) any interest which is taken into account
  under section 469 in computing income or loss
  from a passive activity of the taxpayer,
• (D) any qualified residence interest (within the
  meaning of paragraph (3)),
• (E) any interest payable under section 6601 on
  any unpaid portion of the tax imposed by section
  2001 for the period during which an extension of
  time for payment of such tax is in effect under
  section 6163, and
• (F) any interest allowable as a deduction under
  section 221 (relating to interest on educational
  loans).

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What should be in the summary?

• Write the summary.

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Here is how RIA summarized it

• K-5510 IntroductionNo Deduction for Personal
  Interest.
• Noncorporate taxpayers may not deduct personal
  interest. Personal interest is, in general, any
  interest that is not home mortgage interest
  (i.e., qualified residence interest), investment
  interest, business interest, or qualified
  education loan interest.
• NOTE RIAs purpose in writing a summary is
  different than yours in writing a research memo.

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Quotes and Summarizing IRC Sections

• See reminders memo on 223A Website
• EX 162(a)
• EX - 121

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More practice Rev. Rul. 85-184, 1985-2 CB 84
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How to summarize

• Helpful steps
• Read
• Read and take notes (crucial facts, key IRC
  rules, etc.)
• What is the rationale for the holding why did
  the IRS (or court) rule this way?
• Do you understand it?
• How would you explain it verbally to someone (do
  it if possible)
• Write your summary
• Review against the full text

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RIAs summary

• Utility customers, who pay additional amounts on
  their utility bills to utility company acting as
  agent for charitable org. that assists
  individuals with emergency energy needs, are
  entitled to deduction for additional amount in
  year paid. (Ann 1705.39(80))
• What is missing from this summary?

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Paraphrasing

• Putting the summary of a document in your own
  words.
• Sometimes the IRS and courts say things in very
  helpful ways that make strong point youll want
  to use.
• Use quotes.
• See example on next slide.

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Moss, 80 TC 1073 (1983)

• Daily meals are an inherently personal expense,
  and a taxpayer bears a heavy burden in proving
  they are routinely deductible.
• Value to researcher
• Concise
• Emphasizes the key points of the entire holding.

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Moss summary

• You could paraphrase the whole statement (along
  with the rest of the case).
• Q what is value of keeping
• inherently personal
• heavy burden
• AND if you do keep those words, they should be
  in quotes due to how the judge used them in
  context of decision they are really a key part
  of what the judge said. Quotes also emphasizes
  the importance of the words.

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Questions?

• Comments?