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Net Operating Loss Carryback
Petitioner timely filed a Form 1045, Application for
Tentative Refund, claiming an adjustment to his 1991 Federal
income tax based on a net operating loss from 1994.
Books and Records
Petitioner did not produce books and records in support of
his yacht purchases or sales, his yacht charter business, his
real estate transactions, or any of his personal financial
transactions. When petitioner and his ex-wife, a school teacher,
separated in February 1995, she took records related to their
joint checking accounts with NBD Bank8 and SunTrust Bank. In
March 1997, following a period of reconciliation but pending
their final divorce, petitioner’s ex-wife again took joint
checking account records.
OPINION
Gain From Sale of Yachts
Respondent determined that petitioner overstated his basis,
and therefore had unreported gain, in the amounts of $156,848,9
$527,074, and $615,119 in 1994, 1996, and 1997, respectively,
from the sale of a yacht in each year. In reaching his
determination of petitioner’s basis, respondent used the sum of
8 Petitioner’s ex-wife also refers to an account at Summit
Bank, which was acquired by NBD Bank sometime in or around 1993.
9 As noted, respondent conceded in his answer that the
amount of unreported gain was $1,000 less, or $155,848.
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