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Survey Article


The courts in the Eleventh Circuit heard a number of relatively prominent tax related cases in 2007. In United States v. Mount Sinai Medical Center of Florida, Inc., the Eleventh Circuit held that medical residents are potentially eligible for the student exemption from social security taxes, with their eligibility being determined on a case-by-case basis. In Estate of Jelke v. Commissioner, the Eleventh Circuit vacated the United States Tax Court's valuation methodology in computing, for estate tax purposes, the net asset value of a holding company in which the decedent held a minority interest. The Eleventh Circuit held that the decedent's estate should be allowed a full dollar-fordollar discount for the tax liability associated with the built-in gain in the holding company's assets. In addition, in Womack v. Commissioner, the Eleventh Circuit joined the list of federal courts of appeals that have consistently held that the proceeds from the sale of rights to future installment payments of state lottery winnings are taxed as ordinary income, rather than as capital gains. In a long and very fact-intensive opinion in Estate of Kanter v. Commissioner, the Tax Court, on remand from the Eleventh Circuit, upheld its earlier finding that Claude M. Ballard and others had fraudulently failed to report income from a kickback scheme. In United States v. Coastal Utilities, Inc., the United States District Court for the Southern District of Georgia granted the government's motion for summary judgment and held that universal support payments received by a telephone company from the federal government and access funds received from Georgia were income to a telephone company, not contributions to capital not subject to tax. Finally, in Brandon Ridge Partners v. United States the United States District Court for the Middle District of Florida denied a partnership's motion for summary judgment and held that the extended six-year statute of limitations applied to allow an adjustment of partnership items related to a tax shelter transaction.