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After concessions,1 the issues remaining for decision are:
(1) Whether petitioner had unreported income of $986,856
from funds diverted from his wholly owned corporations;
(2) whether petitioner had unreported income of $12,913 from
dividends earned from brokerage accounts held in his name;
(3) whether petitioner had unreported income of $20,641 from
dividends earned from brokerage accounts held in the names of
petitioner’s nominees;
(4) whether petitioner had income of $27,992 from interest
earned on funds diverted from his wholly owned corporations;
(5) whether petitioner is entitled to depreciation
deductions of $9,963 claimed on his return;
(6) whether petitioner had unreported rental income of
$43,123 from two corporations owned by him;
(7) whether petitioner is subject to an addition to tax
under section 6653(a)(1) for negligence; and
(8) whether petitioner is subject to an addition to tax
under section 6661 for substantially understating his income tax.
1 In addition to issues settled in a stipulation of settled
issues filed in this case, petitioner conceded on brief that he
is not entitled to a rental expense deduction of $19,410 or to an
investment interest expense deduction of $4,271 claimed on his
1988 return. He also conceded that he is liable for an addition
to tax under sec. 6651(a)(1) for failure to timely file his
return.
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