Theodore A. Andros and Joan B. Andros - Page 21

                                        -21-                                          
          for a management fee and accounting fee of $22,500 and $270,                
          respectively.  These ordinary losses arose from purchased put               
          options on Treasury bills.  Each of Tandrill's purchased put                
          options was closed out at a loss in 1979.                                   
               Tandrill also reported short-term capital gains of $163,666 on         
          this return, computed as the excess of short-term gains of                  
          $1,736,366 over short-term losses of $1,572,700.  The $1,736,366 in         
          short-term capital gains arose from the sale of put options on              
          Treasury bills. The $1,572,700 in short-term capital losses arose           
          from futures transactions in gold, silver, copper, and Treasury             
          bills.                                                                      
               b.  1980                                                               
               On its 1980 partnership return, Tandrill reported an ordinary          
          loss of $19,428 on Treasury bill futures transactions, interest             
          income of $36,065, and deductions for a management fee and                  
          accounting fee of $43,750 and $9,700, respectively. Tandrill also           
          reported short-term capital losses of $918,244 and long-term                
          capital gains of $1,509,077.  Both the short-term capital losses            
          and long-term capital  gains  arose  from  commodity  futures               
          transactions.                                                               
          Petitioners' 1979 and 1980 Federal Income Tax Returns                       
               Peat Marwick’s Miami office prepared petitioners’ returns for          
          both years in issue.  Petitioner provided Peat Marwick with his tax         
          information and copies of his 1979 and 1980 Schedules K-1 from              
          Tandrill for use in Peat Marwick’s preparation of petitioners’ 1979         
          and 1980 returns.                                                           



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