Leon and Belle Atkind - Page 16

                                                - 16 -                                                  
            investment alone, petitioners claimed an operating loss in the                              
            amount of $20,326 and investment tax and business energy credits                            
            related to Hyannis totaling $39,604, while petitioners'                                     
            investment in Hyannis was $25,000.  The direct reductions in                                
            petitioners' Federal income tax, from just the tax credits,                                 
            equaled 158 percent of their cash investment.  Given petitioners'                           
            combined gross income of $363,705 for 1981, we find petitioner's                            
            alleged lack of interest in the tax benefits generated by Hyannis                           
            Also, we are unpersuaded by petitioners' efforts to                                         
            trivialize this case.  The argument is that because of                                      
            petitioner's heavy business responsibilities, his great wealth,                             
            and his substantial income, he could not be expected to spend                               
            much time on a mere $25,000 investment.  In petitioner's words                              
            "because of the comparatively minimal amount, it did not get the                            
            diligence or the discretion that probably should have been given                            
            to it".  In our view, despite petitioner's numerous and                                     
            significant responsibilities, he is required to exercise due care                           
            with respect to his Federal income taxes.  Obviously, there is no                           
            rule permitting wealthy people to be negligent with respect to                              
            claims of tax benefits but imposing penalties on those with less                            
            income who claim the same benefits.  Moreover, the record here                              
            demonstrates that the tax benefits of the Hyannis deal were not                             
            trivial to petitioner.  While petitioner paid $25,000 for his                               
            share of Hyannis, on his 1981 tax return he indicated ownership                             
            of investment property of $198,016 related to Hyannis, and that                             

Page:  Previous  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  Next

Last modified: May 25, 2011