- 2 - After concessions by the parties, the issue for decision is whether petitioners may take a business bad debt deduction for payment made on a guarantee of corporate indebtedness. Background This case was submitted fully stipulated under Rule 122.1 The stipulation of facts and exhibits are incorporated herein by this reference and found accordingly. Petitioners, husband and wife, resided in Syosset, New York, at the time of the filing of the petition. They filed their 1988 Federal income tax return untimely on April 17, 1992, and their 1989 Federal income tax return untimely on April 15, 1993. On January 12, 1995, respondent mailed to petitioners a statutory notice of deficiency for the 1988 and 1989 taxable years. Dutchess Processing Company, Inc. (Dutchess), was incorporated in August 1974, to engage in the processing, preserving, and canning of apples and apple byproducts. Its shareholders and officers were petitioner Glenn Peterson, his father John Peterson, and Woodrow Pereira.2 1 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. 2 The stipulation of facts refers only to the status of these individuals as officers, but petitioners' opening brief describes them as the "three shareholders" who were "all active (continued...)Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011