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spouse, Roberta, was not employed outside the home. On their
1981 Federal income tax return, petitioners Stone reported gross
income from wages, interest, and dividends in excess of $250,000.
Consequently, in the absence of significant deductions or
credits, they were subject to payment of Federal income taxes in
substantial amounts for taxable year 1981.
Petitioner Joseph Cote (Cote) was a corporate bond trader
for Merrill Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch),
during 1981. His wife, Mary, was not employed outside the home.
On their 1981 Federal income tax return, petitioners Cote
reported gross income from wages, interest, and dividends in
excess of $320,000. Consequently, in the absence of significant
deductions or credits, they were subject to payment of Federal
income taxes in substantial amounts for taxable year 1981.
Stone is a limited partner in Northeast Resource Recovery
Associates (Northeast) and Cote is a limited partner in Hyannis
Recycling Associates (Hyannis). For convenience, we refer to
these two partnerships collectively as the Partnerships.
Petitioners have stipulated that the transactions involving
the Sentinel EPE recyclers leased by the Partnerships are
substantially identical to those in the Clearwater Group limited
partnership (Clearwater), the partnership considered in Provizer
v. Commissioner, T.C. Memo. 1992-177. In addition, petitioners
have stipulated substantially the same facts concerning the
underlying transactions as we found in the Provizer case.
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