Tax,
Law Practice
Sep. 1, 2021
Tax on law firm loans? The strange case of David Novoselsky
When you receive a loan, is the money taxable? Of course not, because you must pay back the money. Can lawyers borrow, too, just like anyone else? Of course, and for that reason, many lawyers and litigation funders are fretting about a recent Tax Court ruling.
Robert W. Wood
Managing Partner
Wood LLP
333 Sacramento St
San Francisco , California 94111-3601
Phone: (415) 834-0113
Fax: (415) 789-4540
Email: wood@WoodLLP.com
Univ of Chicago Law School
Wood is a tax lawyer at Wood LLP, and often advises lawyers and litigants about tax issues.
When you receive a loan, is the money taxable? Of course not, because you must pay back the money. Can lawyers borrow, too, just like anyone else? Of course, and for that reason, many lawyers and litigation funders are fretting about Novoselsky v. Commissioner, T.C. Memo. 2020-68 (2020). In that case, a lawyer was taxed on loans -- litigation funding. This perfect storm is full of tax lessons.
David Novoselsky, a...
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