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MEMORANDUM FINDINGS OF FACT AND OPINION
HALPERN, Judge: By notice of deficiency dated March 17,
1994, respondent determined deficiencies and additions to tax
against petitioner as follows:
Additions to Tax
Sec. Sec. Sec.
Year Deficiency 6653(a)(1)(A) 6653(a)(1)(B) 6661
1986 $32,153 $1,608 1 ---
1987 53,585 2,679 1 $13,396
1 50 percent of interest due on deficiency amount.
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
After concessions by the parties, the issues remaining for
decision are: (1) Whether petitioner may deduct losses incurred
by his wholly owned S corporation, Ballard Marine, Inc. (Ballard
Marine), in its operation of its yacht chartering business, or
whether such deductions are nondeductible because they were
incurred in an activity not engaged in for profit within the
meaning of section 183(a), and (2) whether petitioner is liable
for the additions to tax determined by respondent.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulations of fact filed by the parties and attached
exhibits are incorporated herein by this reference.
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