Daily Tax Report ®

Neurosurgeon Can’t Claim Capital Gains Rate on Ordinary Income

Jan. 13, 2021, 9:48 PM

A neurosurgeon can’t claim a more preferable tax rate on $100,000 of income because he owned the majority of the company that made the payment, the U.S. Tax Court said.

At issue in the case is the tax treatment of capital gains—assets that meet a holding period requirement can be taxed at a 20% rate, generally accompanied by an additional 3.8% net investment income tax, rather than the 37% rate on the top income tax bracket.

California neurosurgeon Aaron G. Filler was the sole proprietor of NeuroGrafix Inc., a neurography imaging business. He was to receive...

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