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Petitioners Docket No. Year Deficiency
Zahirudeen and
Carol M. Premji 8372-94 1990 $ 18,501
Carl John Norby 10353-94 1990 $ 15,959
In an Amendment to Answer filed in docket No. 8372-94 respondent
asserted an increased deficiency of $4,448 based on the
allegation that petitioners Premji failed to report interest
income of $29,329 actually or constructively received in 1990.
Petitioners and respondent have made concessions with respect to
the amount of the interest income received by the Premjis, and
those concessions should be reflected in the computations for
entry of the decision.
The primary issue in both of these cases is whether
petitioners Premji and Norby are entitled to theft loss
deductions in 1990 resulting from their investment of funds with
M&L Business Machine Company, Inc., which, through its officers
and shareholders, operated a ponzi scheme. The resolution of
this issue depends on whether there existed a reasonable prospect
of recovery in that year.
Secondary issues in the Premji case are whether petitioners
constructively received certain amounts of interest income in
1990 and whether certain amounts of interest actually received in
1990 constitute taxable income to them in that year.
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Last modified: May 25, 2011