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were entered into primarily for profit; (2) whether petitioners are
liable for additions to tax for negligence or intentional disregard
of rules or regulations for 1976 and 1980; and (3) whether
petitioners are liable for additional interest for 1976 and 1980.
We find that the underlying options-spreads and futures-
trading transactions by Tandrill were not entered into primarily
for profit, and we therefore hold that respondent properly
disallowed petitioners’ allocable share of Tandrill’s losses for
1979 and 1980. We further hold that petitioners are not liable for
additions to tax for negligence or intentional disregard of rules
or regulations for 1976 and 1980, but that they are liable for
additional interest for 1976 and 1980.
FINDINGS OF FACT
Some of the facts have been stipulated and are found
accordingly. The stipulations of facts and the attached exhibits
are incorporated herein by this reference.
Background
Petitioners, husband and wife, resided in Key Biscayne,
Florida, at the time they filed their petition. They filed joint
Federal income tax returns for all relevant years. In April 1980,
petitioners filed a Form 1045, Application for Tentative Refund,
claiming that they were entitled to a net operating loss carryback
of $1,766,137 from 1979 to 1976.
Joan B. Andros is involved in this case by virtue of having
filed joint Federal income tax returns with her husband, Theodore
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