Kluener's 1989 Federal income taxes (Robert G. Kluener and
Charlotte J. Kluener are sometimes hereinafter referred to as the
Klueners, Robert G. Kluener is referred to individually as Mr.
Kluener, and Charlotte J. Kluener is referred to individually as
Ms. Kluener). Unless otherwise noted, all section references are
to the Internal Revenue Code in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
After concessions, the issues remaining for decision are
whether petitioners are liable for: (1) Income tax on the gain
realized from the sales of certain horses that Mr. Kluener
transferred2 to his wholly owned corporation prior to the sales;
and (2) the accuracy-related penalty provided by section 6662(a)
for a substantial understatement of income tax.
FINDINGS OF FACT
Some of the facts have been stipulated for trial pursuant to
Rule 91. The parties' stipulations of fact are incorporated
herein by reference and are found as facts in the instant case.
Mr. Kluener died on October 14, 1991. At the time the
petition in the instant case was filed, the executors of Mr.
Kluener's estate were Donald E. Hathaway (Mr. Hathaway), who
1(...continued)
of deficiency. Respondent accordingly determined the deficiency
and penalty in issue against his estate.
2 The use of the words "transfer", "receive", "receipt",
"pay", and similar terms to describe the form of the transaction
in issue does not indicate that we accept that the substance of
that transaction accords with its form.
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