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Following concessions by the parties,1 the issues for decision
are:
(1) Whether petitioners are entitled to a claimed $650,000
theft loss in 1985 that would permit them a net operating loss
carryover deduction in 1988. We hold that petitioners are not
entitled to the claimed theft loss in 1985.
(2) Whether petitioners are liable for the addition to tax
under section 6653(a)(1) for 1988. We hold that petitioners are so
liable.
(3) Whether petitioners are liable for the addition to tax
under section 6661 for 1988. We hold that petitioners are so
liable.
(4) Whether petitioners are liable for the accuracy-related
penalty under section 6662 (a) for 1989. We hold that petitioners
are so liable.
All section references are to the Internal Revenue Code for
the years under consideration. All Rule references are to the Tax
Court Rules of Practice and Procedure.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. The
stipulation of facts and the attached exhibits are incorporated
herein by this reference.
Background
Petitioners, husband and wife, resided in Escondido,
1 Respondent has conceded that petitioners are not liable
for the sec. 6651 addition to tax for 1988. Petitioners have
conceded the deficiency for 1989.
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