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Federal income tax for petitioners' 1981 taxable year was
substantial and attributable to tax-motivated transactions within
the meaning of section 6621(d).1
After concessions,2 the issues for decision are:3 (1)
Whether petitioners have previously "resolved" and "settled" all
issues in the instant case; (2) whether a bad debt deduction in
the amount of $15,064 claimed by petitioners on their 1981 return
should be treated as a business bad debt or a nonbusiness bad
debt; and (3) whether petitioners are entitled to deduct losses
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
2 Respondent concedes that petitioners are entitled to an
investment tax credit for the 1981 taxable year in the amount of
$713 and that no portion of any deficiency determined for the
1981 taxable year is attributable to a tax-motivated transaction
within the meaning of sec. 6621(d).
In the notices of deficiency, respondent disallowed losses
claimed by petitioners on Schedule E of their 1980 and 1981
Federal income tax returns in the amounts of $14,033 and $67,033,
respectively, which losses related to certain equipment leasing
activities. Petitioners and respondent agree that petitioners
are entitled to losses from those activities for petitioners'
1980 and 1981 taxable years in the amounts of $20,232 and
$55,037, respectively.
3 Respondent served petitioners with a request for admissions
pursuant to Rule 90(a) and filed the same with the Court pursuant
to Rule 90(b). Petitioners failed to respond to respondent's
request for admissions. Consequently, each matter set forth
therein is deemed admitted pursuant to Rule 90(c). Alexander v.
Commissioner, 926 F.2d 197, 198-199 (2d Cir. 1991), affg. per
curiam T.C. Memo. 1990-315; Marshall v. Commissioner, 85 T.C.
267, 272 (1985); Morrison v. Commissioner, 81 T.C. 644, 647
(1983). Respondent did not rely on the deemed admissions,
however, and proceeded at trial as if they did not exist.
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