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After concessions, the deficiency and the addition to tax in
dispute are in the amounts of $5,610 and $1,402, respectively.
The issues remaining for decision are whether petitioner is
entitled to a nonbusiness bad debt deduction for 1987 and whether
petitioner is liable for the addition to tax for failure to file
timely her tax return for that year.
FINDINGS OF FACT
Some of the facts have been stipulated, and the stipulated
facts are incorporated in our findings by this reference. At the
time the petition was filed, petitioner resided in San Antonio,
Texas.
In 1987, petitioner left her job to return to school to seek
her master's degree in nursing. Petitioner withdrew money from
her retirement plan in order to finance her education and to
support her family while she attended school.
During 1987, petitioner was dating Raul Machuca (Machuca).
Machuca was experiencing financial difficulties, and petitioner
attempted to assist him. For example, to prevent his car from
being repossessed, Machuca transferred the title to the car to
petitioner, and petitioner, using the car as collateral, borrowed
$9,500. Petitioner never drove or possessed the car. When
petitioner paid off the loan, title to the car was transferred
back to Machuca. Machuca later gave petitioner a check for
$50,000 as partial payment for this and other assistance
petitioner had given Machuca. Petitioner was unable to cash the
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