- 2 - All section references are to the Internal Revenue Code in effect for the years in issue. All Rule references are to the Tax Court Rules of Practice and Procedure. Petitioner Kondamodi S. Rao, hereinafter referred to as Dr. Rao or petitioner, omitted gross income from his sole proprietorship psychiatry practice in 1986, 1987, and 1988. Petitioners deducted losses on their joint Federal income tax returns in 1986, 1987, and 1988 from the operation of Forest Park Medical Center (the medical center). After concessions, the issues for decision are: (1) Whether Dr. Rao1 is liable for the additions to tax for fraud pursuant to section 6653(b)(1)(A) and (B) for 1986 and 1987 and section 6653(b)(1) for 1988; (2) whether petitioners have substantiated deductions from the operation of the medical center for 1986, 1987, and 1988 in amounts greater than that allowed by respondent; and, if so, (3) whether petitioners had amounts "at risk" under section 465 to enable them to deduct losses from the operation of Forest Park Medical Center; and, if so, (4) whether the passive loss rules under section 469 either restrict or disallow petitioners' losses from the operation of the medical center; 1 Respondent conceded the additions to tax for fraud for B. Satyaveni Rao (Mrs. Rao) at trial.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011