- 3 -
2 Fifty percent of the interest due on the entire deficiency. Some parts of the
notice of deficiency that list the additions to tax do not show that respondent
determined any additions to tax under sec. 6653(a)(1)B), but Schedules 5, 8, and 14 of
the notice of deficiency do show these determinations. Taking the 20-page notice of
deficiency as a whole, and in light of the fact that par. 3 of respondent’s answer
specifically refers to sec. 6653(a)(1)(B) and that petitioners have not raised any
objection to that reference, we conclude that petitioners were not misled by
respondent’s failure to note the sec. 6653(a)(1)(B) determinations on several pages of
the notice of deficiency where one would have expected the determinations to be noted.
Accordingly, we hold that respondent made the above-noted sec. 6653(a)(1)(B)
determinations in the instant case’s notice of deficiency. Bokum v. Commissioner, 94
T.C. 126, 127 n.2 (1990), affd. 992 F.2d 1132 (11th Cir. 1993); Saint Paul Bottling
Co. v Commissioner, 34 T.C. 1137 (1960).
After concessions by respondent2 and a deemed concession by
petitioners,3 the issues for decision are as follows:
2 Among respondent’s concessions are the following:
(1) Respondent concedes that petitioners timely filed
their 1986 and 1988 tax returns, and thus that petitioners
are not liable for the sec. 6651(a) addition to tax for 1986
and 1988.
(2) Respondent concedes that the Rodriguez Key project
was a transaction entered into for profit.
(3) Respondent concedes, for purposes of the instant
case, that petitioners’ 1984 and 1985 tax returns are
correct, with the exception of the net operating
“theft/casualty” loss carryover deductions claimed thereon.
(4) Respondent concedes that Laney had a 1983 loss from
the foreclosure of the Rodriguez Key property and that
petitioners may carry this loss forward to 1986 and later
years, but contends that the amount available for 1986 is
$90,578.21 and that the loss is a capital loss, subject to
the limitations of secs. 165(f) and 1211. The effect of
this concession would be to allow petitioners to deduct
$3,000 from ordinary income for each of the years in issue.
3 Although petitioners dispute the self-employment tax
determinations, it appears that this is merely a consequence of
their contention that they are entitled to deduct theft/casualty
net operating loss carryovers, and not because they otherwise
dispute the application of ch. 2. As infra table 2 shows,
(continued...)
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