-2-
respective amounts of $983,966.13 and $2,338.90, and additional
interest for 1980 pursuant to section 6621(c).1
Pursuant to an amended answer, respondent asserts that
petitioners are liable for additional interest for 1976 pursuant to
section 6621(c), and additions to tax for 1976 and 1980 pursuant to
section 6653(a) in the respective amounts of $49,198 and $117.
This case involves petitioner Theodore A. Andros' investment
in an options-spreads and futures-trading partnership, Tandrill
Associates (Tandrill). It is part of the Arbitrage Management tax
litigation project. The deficiencies result from respondent’s
disallowance of Theodore A. Andros’ allocable share of partnership
losses from: (1) 1979 option spread transactions involving
Government securities, and (2) 1979 and 1980 futures transactions
involving commodities and Government securities. The deficiency
for 1976 results from respondent's reduction in petitioners' net
operating loss carryback to that year from 1979.
The issues for decision are: (1) Whether respondent properly
disallowed petitioners’ allocable share of Tandrill’s losses for
1979 and 1980, pursuant to section 165(c)(2); the resolution of
this issue turns on whether the underlying partnership transactions
1 Pursuant to the Tax Reform Act of 1986, Pub. L. 99-514,
sec. 1151(c)(1), 100 Stat. 2744, former sec. 6621(d) was
redesignated as sec. 6621(c).
Unless otherwise indicated, all section references are
to the Internal Revenue Code in effect for the years in issue.
All Rule references are to the Tax Court Rules of Practice and
Procedure.
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