KENCO Restaurants, Inc. et al. - Page 2

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                       MEMORANDUM FINDINGS OF FACT AND OPINION                        

               HALPERN, Judge:  These cases have been consolidated for                
          trial, briefing, and opinion.  Respondent has determined                    
          deficiencies in income tax and accuracy-related penalties as                
          follows:                                                                    
          Petitioner               Year      Deficiency     Penalty                   
          Kenco Restaurants,       1990      $36,664        $7,333                    
          Inc. (Kenco)             1991      40,311         8,062                     
                                   1992      23,068         4,614                     
          K-K Restaurants,         1990      35,056         7,011                     
          Inc. (K-K)               1991      18,962         3,792                     
                                   1992      21,304         4,261                     
          Tiffin Avenue Realty,    1990      4,772          954                       
          Co., Inc. (Tiffin)      1992       4,124          825                       
          Bryan Realty, Inc.       1992      174            35                        
          (Bryan)                                                                     
               After concessions, the remaining issues to be determined               
          are:  (1) Whether respondent's reallocations of deductions among            
          petitioners and certain other commonly controlled corporations              
          under section 482 were necessary to clearly reflect the income of           
          such corporations, and (2) whether petitioners are liable for the           
          accuracy-related penalties imposed pursuant to section 6662.                
               Unless otherwise indicated all section references are to the           
          Internal Revenue Code as in effect for the years in issue, and              
          all Rule references are to the Tax Court Rules of Practice and              
          Procedure.                                                                  







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