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Following concessions, we must decide:
1. Whether petitioner may deduct certain payments that he
made to the Hollywood, Florida, police department as a charitable
contribution. We hold he may not.
2. Whether petitioner may deduct those payments as an
expense under section 212 or a portion of these payments as a
casualty loss under section 165. We hold he may not.
3. Whether petitioner is entitled to a bad debt deduction
with respect to two "loans". We hold he is not.
4. Whether petitioner is liable for an addition to his 1987
tax under section 6651(a)(1). We hold he is.
Unless otherwise stated, section references are to the
Internal Revenue Code in effect for the year in issue. Rule
references are to the Tax Court Rules of Practice and Procedure.
Dollar amounts are rounded to the nearest dollar.
FINDINGS OF FACT
Some facts have been stipulated and are found accordingly.
The stipulated facts and exhibits are incorporated herein by this
reference. Petitioner resided in Hollywood, Florida, when he
filed his petition.
On August 28, 1986, the Hollywood, Florida, police
department (Police Department), with the assistance of the United
States Marshals (collectively referred to as Officers), searched
petitioner's home pursuant to a valid search warrant. The
Officers found 334 grams of cocaine, $7,362 in United States
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