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MEMORANDUM FINDINGS OF FACT AND OPINION
NIMS, Judge1: Respondent determined deficiencies in the
Federal income tax of petitioners, William N. Carlstedt and Moira
M. Carlstedt, in the amounts of $180,351 and $183,550, for the
taxable years ended December 31, 1990, and December 31, 1991,
respectively. (The term petitioner will be used henceforth to
refer to William N. Carlstedt.)
All section references are to sections of the Internal
Revenue Code in effect for the years at issue, unless otherwise
indicated. All Rule references are to the Tax Court Rules of
Practice and Procedure.
After concessions by petitioners, the issues for decision
are as follows:
1. Whether petitioner engaged in the activity of Carlstedt
Dickman, Inc. (CDI) for 500 hours or less in both 1990 and 1991,
such that petitioner did not materially participate in CDI
pursuant to section 469 and temporary regulations thereunder;
and, if so,
2. Whether section 1.469-2T(f)(2), Temporary Income Tax
Regs., 53 Fed. Reg. 5721 (Feb. 25, 1988), is invalid on its face
1 With the consent of counsel for the parties, the Chief
Judge reassigned this case, after the death of Judge Irene F.
Scott, to Judge Arthur L. Nims, III, for disposition on the
existing record.
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