- 2 -
Respondent determined that petitioners are liable for a
deficiency in Federal income tax of $5,185 and an accuracy-
related penalty under section 6662 of $1,037 for the 2001 taxable
year. After concessions,1 the issue for decision is whether
petitioners’ gross income for 2001 includes $30,714, the portion
of a loan discharged by the United States Department of
Agriculture during that taxable year.
Background
Some of the facts have been stipulated, and they are so
found. An oral stipulation of facts and the exhibits are
incorporated herein by this reference. At the time of filing of
their petition, petitioners resided in Provo, Utah.
In 1991, petitioners received a $50,000 loan from the United
States Department of Agriculture (USDA). At the time,
petitioners were farmers in Hawaii who leased 20 acres of land
for a farming operation. The loan, which was secured by the
farm,2 was to be used to make lease payments. It is unclear from
the record whether the lease payments were ever made.
1 Respondent concedes that petitioners are not liable for
the accuracy-related penalty under sec. 6662 of $1,037 for the
2001 taxable year. Petitioners concede that they are not
entitled to an IRA deduction of $300 for the 2001 taxable year.
2 Petitioners assert that they owned the farm that was used
to secure the loan by the USDA. The circumstances surrounding
the ownership of this farm are unclear.
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011