Robert Libutti - Page 3

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          (comps) that he received from Trump Plaza Associates, t/a Trump             
          Plaza Hotel and Casino (Trump).  We hold he can.2   Section                 
          references are to the Internal Revenue Code in effect for the               
          years in issue.  Rule references are to the Tax Court Rules of              
          Practice and Procedure.  Dollar amounts are rounded to the                  
          nearest dollar.                                                             
                                     Background3                                      
               Petitioner resided in Secaucus, New Jersey, when he                    
          petitioned the Court.  He filed 1987 and 1988 Federal income tax            
          returns on November 20, 1989.4  He filed a 1989 Federal income              
          tax return shortly after April 15, 1990, and he did so without              
          receiving an extension of time under section 6081(a).  All of               
          petitioner's returns were prepared by a certified public                    
          accountant, and petitioner filed them using the status of                   
          "Married filing separate return".  On each return, petitioner               
          reported profits from his horse brokerage business called Buck              
          Chance Stables (the Stables), which was conducted as a sole                 
          proprietorship.  Petitioner reported that the Stables' profits              
          were $3,169,881 in 1987, $785,900 in 1988, and $796,031 in 1989.            


               2 Accordingly, we also hold that petitioner is not liable              
          for the additions to tax or penalty for substantial                         
          understatements.                                                            
               3 The stipulated facts and the exhibits submitted therewith            
          are incorporated herein by this reference.                                  
               4 He also filed an amended 1987 tax return on or about the             
          same day.                                                                   



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