- 3 - Sometime in 1989, petitioner organized Hampton Partners, of which he was the sole general partner and one of three limited partners. The three limited partners contributed a total of $1,750,000 to Hampton Partners, with petitioner contributing $250,000. Hampton Partners was formed with the objective that petitioner would use the contributed capital to generate profits in the stock market. During the first six months of 1989 petitioner made numerous stock trades that generated large profits. However, in the latter part of the year the partnership lost a substantial amount in a trade involving stock of United Airlines. A dispute then arose among the partners, resulting in lawsuit's being filed involving claims by the other partners against petitioner, and a counterclaim by him against them. Petitioner repaid the other partners, against the advice of his accountant, in the way he thought the money should go back, but the partners were not satisfied. Petitioner had never been sued before, and he found the litigation to be very stressful and career threatening. In October, 1989, petitioner withdrew $208,802 from his individual retirement account (IRA), out of which amount he placed $200,000 in his own brokerage account. The $208,802 was reported as a taxable distribution on petitioners' 1989 Form 1040.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
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