Mary Lee Sharer - Page 13

                                           - 13 -                                            
          petitioner did not offer any documentary evidence supporting her                   
          contention that this $9,555 she received from Sharer Accountancy                   
          in 1987 was in repayment of loans.  Our holding in her favor                       
          resulted from our crediting her testimony that this money                          
          represented loan repayments.                                                       
                However, respondent's position on this issue was                             
          substantially justified.  During 1987, petitioner, who was an                      
          accountant, helped Mr. Sharer with Sharer Accountancy's                            
          accounting business.  Substantially all of the funds that we                       
          ultimately held to be loan repayments were paid to petitioner by                   
          checks drawn on Sharer Accountancy's accounts that were annotated                  
          "spousal wages".  As of the time the notice of deficiency was                      
          issued, as of the time respondent's answer was filed, and at all                   
          other pertinent times, a reasonable basis existed for                              
          respondent's position.  See Wilfong v. United States, supra at                     
          368-369.                                                                           
          C. Partnership Loss Deduction for 1986                                             
                We determined that petitioner had substantiated her                          
          husband's adjusted basis in his partnership interest as of the                     
          end of 1986 so as to be entitled to deduct a partnership loss for                  
          1986.  However, we think that respondent's position was                            
          substantially justified.  Petitioner provided respondent with                      
          copies of the partnership's returns for 1980 through 1985,                         
          helping to substantiate the adjusted basis of the partnership                      
          interest as of the end of 1986, only shortly before trial.  As of                  




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  Next

Last modified: May 25, 2011