Marjorie is a software systems engineer for Hacker Corporation. In November 2013, she inherited two parcels of
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In 2014, Marjorie applied to Brower Township for a change of zoning. The Brower Township Board of Supervisors denied her application in November 2014. Marjorie filed a constitutional challenge to Brower Township's zoning ordinance in 2015. The board of supervisors denied her constitutional challenge. Marjorie filed an appeal of the denial in Brower County District Court on September 25, 2015. On October 5, 2015, the Brower Township Board of Supervisors began consideration of a new zoning ordinance. Under the ordinance, Marjorie's land would be rezoned to a designation that would allow three residences per acre. At this point, Marjorie withdrew her court appeal, pending the outcome of the new zoning ordinance. On January 10, 2016, the new zoning ordinance was adopted. Marjorie estimated that the value of the land increased to at least $21,000 as a result of the rezoning.
Marjorie incurred $14,000 in attorney's fees and other costs in challenging the zoning ordinance. She paid $3,500 of the expenditures in 2015 and $10,500 in 2016. She would like to know the proper income tax treatment of these expenses. Can Marjorie deduct the costs of challenging the zoning ordinance? Write a memorandum explaining the deductibility of the costs of challenging the zoning ordinance.
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Concepts In Federal Taxation 2017
ISBN: 9781305965119
24th Edition
Authors: Kevin E. Murphy, Mark Higgins
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