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3. whether petitioners have substantiated their claimed
deductions on Schedule A for certain itemized expenses;
4. whether petitioners have failed to report income in the
amount of $159,282 for taxable year 1990 and whether petitioners
overreported income in the amount of $41,512 for taxable year
1991;
5. whether petitioners are entitled to a business bad debt
deduction for taxable year 1990 for the worthlessness of a loan;
and
6. whether petitioners are liable for accuracy-related
penalties pursuant to section 6662(a) for the taxable years in
issue.
FINDINGS OF FACT
Some of the facts have been stipulated for trial pursuant to
Rule 91. The parties' stipulations of fact are incorporated
herein by reference and are found as facts in the instant case.
At the time they filed their petition in the instant case,
petitioners resided in Atlanta, Georgia. Petitioners are husband
and wife.3
During the years in issue, petitioner Nicholas A. Paleveda
(petitioner) was an employee of Mutual Benefit Life Insurance Co.
(MBL). Petitioner received from MBL a Form W-2 for 1990 showing
wage income in the amount of $468,218.34 with Social Security tax
3 Petitioner Marjorie E. Paleveda signed the Federal income
tax returns for the taxable years in issue as Marjorie Ewing.
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