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Respondent determined deficiencies in petitioners' 1990 and
1991 Federal income taxes in the amounts of $6,871 and $632,
respectively, and an accuracy-related penalty under section
6662(a) for the taxable year 1990 in the amount of $1,374.
After concessions,2 the issues for decision are: (1)
Whether petitioners are entitled to a business loss deduction in
the amount of $24,675 for the taxable year 1990; (2) whether
petitioners are entitled to a business loss deduction in the
amount of $3,000 for the taxable year 1991; (3) whether
petitioner Robert Lolli received a $184 taxable refund of taxes
from the State of Arizona during the taxable year 1991; (3)
whether petitioner Robert Lolli received $369 of interest income
during the taxable year 1991; and (4) whether petitioners are
liable for an accuracy-related penalty under section 6662(a) for
the taxable year 1990 for negligence or disregard of rules or
regulations.
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. Although the record does
not disclose petitioners' residence at the time they filed their
2The parties agree that: (1) Petitioner Robert Lolli
received, but failed to report, $24,500 of self-employment income
during the taxable year 1990 that is subject to self-employment
tax under sec. 1401; (2) petitioners did not receive interest
income in the amount of $332 during the taxable year 1990; and
(3) petitioner Robert Lolli earned, but failed to report, $3,106
of W-2 wages earned during the taxable year 1991. We note that
petitioners are entitled to a deduction under sec. 164(f) for
one-half the self-employment tax paid under sec. 1401.
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