Donald D. Bowers and Deborah Bowers - Page 2

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            $46,217, an increased addition to tax under section 6651(a)(1) to                          
            the amount of $2,241, and an increased penalty under section 6662                          
            to the amount of $9,243.                                                                   
                  Unless otherwise indicated, all section references are to                            
            the Internal Revenue Code in effect for the taxable year before                            
            the Court, and all Rule references are to the Tax Court Rules of                           
            Practice and Procedure.                                                                    
                  The issues to be decided in this case are:                                           
                  (1) Whether the Burlington, Connecticut, house was                                   
            petitioners' principal residence so that they may defer                                    
            recognition of the gain on the sale of that house in 1989 under                            
            section 1034;                                                                              
                  (2) if not, what was the amount of petitioners' gain on the                          
            sale of the Burlington house that must be recognized in 1989;1                             
                  (3) whether petitioners are liable for the addition to tax                           
            under section 6651(a)(1); and                                                              
                  (4) whether petitioners are liable for the accuracy-related                          
            penalty under section 6662.                                                                

            1 The parties have phrased this issue as the determination                                 
            of petitioners' basis; however, both parties have presented                                
            evidence and arguments concerning other elements of the                                    
            calculation of gain and treated these as components of basis.                              
            Although the outcome will be the same, in the interest of                                  
            technical clarity, we shall treat this as a question of the                                
            amount of gain.                                                                            

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