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MEMORANDUM OPINION
TANNENWALD, Judge: Respondent determined the following
additions to tax and penalty for petitioner's Federal income
taxes1:
Year Additions to Tax I.R.C. Secs. Penalty
6651(a)(1)2 6653(a)(1)(A) 6661 6662
1988 $9,398.75 $2,950.20 $14,751.00 --
1989 4,978.25 -- -- $4,985.80
After concessions, the issue before us is whether petitioner's
rental operations may be combined with a nonrental partnership
operation, so that petitioner may deduct losses from the rental
operation as nonpassive losses. Based on our decision on this
issue, we shall have to decide whether petitioner is liable for
additions to tax for delinquent filing, negligence, and
substantial understatement, and an accuracy-related penalty for
negligence.
1 There are no deficiencies due, because of net operating
loss carrybacks to the years 1988 and 1989 from the taxable year
1990. However, it is necessary to determine whether deficiencies
would otherwise have been due (if not for such carrybacks), in
order to determine whether additions to tax are proper. Auerbach
Shoe Co. v. Commissioner, 21 T.C. 191, 196 (1953), affd. 216 F.2d
693 (1st Cir. 1954), and cases cited thereat; see also Wentz v.
Commissioner, 105 T.C. 1, 2 (1995).
2 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the taxable years in
issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
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