This Comment analyzes two tax court decisions, Peterson v. Commissioner and Hokanson v. Commissioner, which restricted the availability of the investment tax credit to noncorporate lessors. The author examines the courts' use of the "reasonable certainty" and "realistic contemplation" tests in determining whether the term of a lease was less than fifty percent of the property's useful life, the criteria required for qualification for the tax credit. The author analyzes the decisions and concludes that the "reasonable certainty" test is consistent with the underlying intent of the noncorporate lessor restrictions and further suggests various devices for securing the credit on an individual level.
Recent Cases Restricting the Availability of the Investment Tax Credit to Noncorporate Lessors and Tax Planning in the Aftermath,
San Diego L. Rev.
Available at: https://digital.sandiego.edu/sdlr/vol20/iss4/16