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incurred in connection with their construction and attempted sale
of a house under section 162.1
FINDINGS OF FACT
Oral stipulations were made at trial. The oral stipulation
of facts and the referenced exhibits are incorporated herein by
this reference. Petitioners, husband and wife, resided in Santa
Ana, California, at the time they filed their petition.
During 1991, petitioner Jack R. Finnegan (Mr. Finnegan) was
a construction consultant. Mr. Finnegan ran his construction
consulting business out of his home in Santa Ana. As a
construction consultant, Mr. Finnegan was hired by third parties:
(1) To construct and estimate the cost of projects such as
houses, banks, restaurants, schools, and hospitals; (2) to help
put bids together; and (3) to act as an arbitrator, architect,
quantity surveyor, developer, project manager, or general
contractor. As a construction consultant, Mr. Finnegan was paid
a fixed amount for each project. He was compensated regardless
of whether the project was sold.
During 1991, in addition to his job as a construction
consultant, Mr. Finnegan constructed a house located at 871
Avenida Acapulco in San Clemente, California (the Acapulco
1 All section references are to the Internal Revenue Code
in effect for the year in issue, and all Rule references are to
the Tax Court Rules of Practice and Procedure.
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