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7443A(b)(3) and Rules 180, 181, and 182.2 Respondent, in three
separate notices of deficiency, determined deficiencies in
petitioners' Federal income taxes and accuracy-related penalties
as follows:
Accuracy-Related Penalties
Docket No. Year Petitioner Deficiency Sec. 6662(c) Sec. 6662(d)
6382-95 1992 Mary K. Fisher and
Charles F. Patterson $7,337 $1,467.00 ---
6383-95 1991 Charles F. Patterson 1,684 336.80 ---
6384-95 1991 Mary K. Fisher 6,630 --- $1,326
Petitioners filed individual Federal income tax returns for 1991
and a joint return for 1992.3 With respect to the 1991 taxable
year, petitioners evenly divided items of income and expense,
pertaining to their horse- and dog-breeding activities, on their
respective Schedules C. After concessions,4 the issues remaining
2 All section references are to the Internal Revenue Code
as amended, unless otherwise indicated. All Rule references are
to the Tax Court Rules of Practice and Procedure.
3 Petitioners were married in 1992.
4 With respect to 1991, respondent has conceded the
following issues: (1) That petitioners' horse-breeding activity
was an activity engaged in for a profit; (2) that petitioner Mary
K. Fisher is entitled to deduct $18,622 and petitioner Charles F.
Patterson is entitled to deduct $18,621 of the Schedule C
expenses claimed on their respective returns, including claimed
depreciation expenses on each return in the amount of $1,405; (3)
that petitioner Mary K. Fisher did not have unreported income in
the amount of $5,539; (4) that petitioner Charles F. Patterson
did not have unreported income in the amount of $16,200; (5) that
petitioner Mary K. Fisher is not liable for the accuracy-related
penalty under sec. 6662(d); and (6) that petitioner Charles F.
Patterson is not liable for the accuracy-related penalty under
sec. 6662(c). Petitioners have each conceded that they are not
entitled to claimed depreciation expenses in the amount of $900.
(continued...)
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