Richard J. and Melodie D. McKeever - Page 2




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                                                      Accuracy-related penalty                         
                  Year              Deficiency        sec. 6662(a)                                     
                  1991              $16,902                 $3,380                                     
                  1992              21,165                  4,233                                      
                  1993              29,073                  5,815                                      
                  After concessions,1 the issues remaining for decision are                            
            whether petitioners’ horse activity during the years at issue was                          
            an activity not engaged in for profit within the meaning of                                
            section 183(a),2 and whether petitioners are liable for accuracy-                          
            related penalties on account of negligence under section 6662(a)                           
            for the years at issue.                                                                    
                                         FINDINGS OF FACT                                              
                  Some of the facts have been stipulated and are so found.                             
            The first and second stipulations of facts are incorporated in                             
            this opinion by this reference.                                                            
            The Petitioners                                                                            
                  Richard J. and Melodie D. McKeever (petitioners) resided in                          
            Norco, California, on the date they filed their petition in this                           
            case.                                                                                      



                  1Petitioners conceded that they received $28,000 of                                  
            unreported taxable commission income in 1993 and that                                      
            respondent’s determinations for 1991 and 1992 are not time barred                          
            by the statute of limitations.                                                             
                  2All 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.  Monetary amounts are                           
            rounded to the nearest dollar.                                                             





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