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Colony II, Building 9, Ltd. Petitioner deducted $28,000 for
worthless debts owed him by that partnership on his 1984 return.
In the notice of deficiency, respondent disallowed the
claimed bad debt. Also in the notice of deficiency, respondent
decreased reported income by $1,933,600. The basis for the
adjustment was that petitioner incorrectly reported fee income in
1984 that should have been reported in other years. In the
amendment to answer and on brief, however, respondent asserts
that reported income for 1984 should have been reduced by
$480,800, rather than the $1,933,600 determined in the notice of
deficiency. Therefore, as a result of her amendment to answer,
respondent's claimed adjustment with respect to Schedule C of the
1984 return is $2,035,424, rather than $582,624 as originally
determined.
In her amendment to answer, respondent reduced the 1984
reported consulting fee income by $480,800 and specifically
identified the amounts of payments from named partnerships
controlled by petitioner. The following fee income was reported
on the 1984 return; however, respondent contends that it properly
belongs on the 1982 and 1983 returns and was so determined in the
notice of deficiency:
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