2
All statutory references are to the Internal Revenue Code
in effect for the years in issue, and all Rule references are to
the Tax Court Rules of Practice and Procedure, except as
otherwise noted.
The issues for decision are: (1) Whether petitioners'
medical corporation and ranching activity should be considered as
one activity for purposes of section 183; (2) whether petitioners
were engaged in their ranching activity with the objective of
making a profit for purposes of section 183; and (3) whether
petitioners are liable for the accuracy-related penalty for a
substantial understatement of income tax under section 6662(a)
and (b)(2).
FINDINGS OF FACT
Some of the facts are stipulated and are so found. The
stipulations of facts and exhibits attached thereto are
incorporated herein by this reference. Respondent objects to the
admission of the third supplement to the stipulations of facts,
and the exhibits attached thereto, alleging that petitioners did
not timely submit the exhibits contained therein, thereby
preventing respondent from using the information contained within
the documents for impeachment purposes at trial. Respondent had
agreed to one extension of the submission deadline established by
the pretrial order, yet petitioners did not provide the documents
by this deadline. The exhibits consist of copies of bills and
canceled checks. At trial, respondent stipulated their
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