Melvin J. Laney and Carolyn A. Laney - Page 3

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         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,                                

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