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petitioners' Federal income taxes, as well as accuracy-related
penalties, in the following amounts:
Accuracy-Related Penalty
Year Deficiency Sec. 6662(a)
1991 $6,098 $1,220
1992 6,794 1,359
The issues for decision are: (1) Whether petitioners'
horse-breeding activities constitute an activity engaged in for
profit for the purposes of sections 162 and 183; and (2) whether
petitioners are liable for the accuracy-related penalty under
section 6662(a).
FINDINGS OF FACT
Some of the facts have been stipulated, and they are so
found. The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time of filing the
petition, petitioners resided in Clovis, California.
During the years in issue, petitioners were each employed
full time as registered nurse supervisors. Since 1991,
petitioners also operated a medical/legal consulting firm. The
firm reviewed medical charts upon request. Petitioners reported
combined gross income from this employment during the period 1991
through 1994 in the following amounts:
Year Amount
1991 $105,992
1992 133,572
1993 138,042
1994 145,475
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