- 2 -
The issues remaining for decision are:
(1) Is the loss at issue for each of the years 1989 and
1990 a passive activity loss within the meaning of section 469?
We hold that it is.
(2) Are petitioners liable for each of the years 1989 and
1990 for the addition to tax under section 6651(a)? We hold that
they are.
(3) Are petitioners liable for each of the years 1989 and
1990 for the accuracy-related penalty under section 6662(a)? We
hold that they are.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
Petitioners resided in Newport Beach, California, at the
time the petition was filed. They filed joint Federal income tax
returns for the years 1989 and 1990.
Petitioner Arnold P. Mordkin2 is an attorney who was ad-
mitted to practice law in California in 1963 and who specialized
during all relevant periods in personal injury and medical
malpractice matters. During the years at issue, petitioner, who
resided in California, practiced law on a full-time basis as an
employee of Arnold P. Mordkin, Inc. (Mordkin, Inc.), a profes-
sional corporation located in California, and Mordkin, Inc. was a
stockholder of Bridgman, Mordkin, Gould & Shapiro, Inc., a
2 References to petitioner in the singular are to petitioner
Arnold P. Mordkin.
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