Richard John Kadunc - Page 4

                                                - 4 -                                                 

            his 1991 return.  Generally, under section 111 and the                                    
            regulations thereunder, if a tax was deducted on a prior year's                           
            return that resulted in a reduction of tax and a tax benefit to                           
            the taxpayer, a subsequent recovery by the taxpayer of such tax                           
            must be included in gross income in the year the recovery is                              
            received.  Prewitt v. Commissioner, T.C. Memo. 1995-24; Kadunc v.                         
            Commissioner, T.C. Memo. 1992-61, affd. without published opinion                         
            981 F.2d 1251 (4th Cir. 1992); Kass v. Commissioner, T.C. Memo.                           
            1988-403; Tracy v. Commissioner, T.C. Memo. 1985-40, affd.                                
            without published opinion 782 F.2d 1045 (7th Cir. 1985); Nyhus v.                         
            Commissioner, T.C. Memo. 1979-519; Monroe v. Commissioner, T.C.                           
            Memo. 1979-100.  Petitioner presented no evidence to show that he                         
            had not realized a tax benefit from his deduction of State income                         
            taxes on his 1990 return.  On the contrary, the copy of                                   
            petitioner's 1990 return reflects that petitioner unquestionably                          
            enjoyed a tax benefit by his deduction of State income taxes for                          
            1990.  On this record, the Court sustains respondent on this                              
            With respect to the $1,296 disallowed home mortgage interest                              
            expenses, respondent received from Gulf States a "substitute"                             
            Form 1098, "Annual Tax and Interest Statement" (Form 1098),                               
            reflecting "net" interest paid by petitioner to Gulf States                               
            during 1991 that totaled $15,600.83.  Although the Form 1098                              
            showed total interest "applied" to 1991 as $16,896.33, the form                           

Page:  Previous  1  2  3  4  5  6  7  8  9  Next

Last modified: May 25, 2011