John Franklin Foust - Page 2

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                                        Addition to tax     Penalty                   
               Year      Deficiency     Sec. 6651(a)(1)1    Sec. 6662                 
               1989      $75,389           $3,769.45        $15,077.80                
               Following concessions by the parties,2 the issues for                  
          decision are whether:  (1) Petitioner is entitled to a farm loss            
          deduction of $110,000 for farm rents purportedly paid; (2)                  
          petitioner had unreported income from one of his S corporations,            
          Cheyenne River Corp., Inc. (Cheyenne), by reason of its                     
          constructive receipt of Federal disaster and crop insurance                 
          payments to its creditors; (3) petitioner is entitled to a                  
          Schedule E loss from Cheyenne that was not reported on Cheyenne’s           
          Form 1120S; and (4) petitioner is liable for a section 6651(a)(1)           
          addition to tax for failing to timely file his 1989 Federal                 

               1 Unless otherwise indicated, all section references are to            
          the Internal Revenue Code in effect for the taxable year in                 
          issue.  All Rule references are to the Tax Court Rules of                   
          Practice and Procedure.  Except for respondent’s determinations             
          shown above, dollar amounts have been rounded to the nearest                
               2 Petitioner conceded the claim asserted in his petition               
          that a substantial amount of the payment he received in a                   
          contract settlement with his former employer, see infra note 5,             
          should be excluded from gross income under sec. 104(a)(2).                  
          Respondent conceded that petitioner was entitled to a net                   
          operating loss deduction of $53,979 claimed in his return,                  
          representing a carryover from a prior year, that had been                   
          disallowed by the statutory notice of deficiency.  Petitioner               
          raised at trial and on brief a further claim of entitlement to an           
          unused investment tax credit carryover from 1987; the Court did             
          not consider this claim, as not having been properly pleaded, as            
          having been raised too late, and as lacking foundation in the               

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