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disregard of rules and regulations under section 6662(b)(1).2
Because we decide that Mary Catherine is not entitled to use the
LCM method, various issues that would have been implicated by our
decision to the contrary have been mooted.
FINDINGS OF FACT
Background
Most of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated by this reference.
When the petitions in these cases were filed, petitioners
resided in Windsor, Connecticut. Petitioners filed joint Federal
income tax returns for 1984, 1986, 1987, 1988, 1989, and 1990.
Petitioner filed a separate Federal income tax return for 1991.
Petitioner entered the real estate business in 1969 when he
began renovating apartment houses. Later, petitioner changed the
focus of his business to building new houses.
Prior to 1986, Derekseth Corp. (Derekseth), petitioner's
wholly owned C corporation, was the business vehicle used by
petitioner to acquire land, subdivide the land into lots, build
houses on the lots, and sell houses and lots to individuals.
On November 21, 1986, Mary Catherine was incorporated under
the laws of Connecticut. Petitioner has been the only
2 Respondent concedes that petitioners are not liable for a
penalty for substantial understatement of income tax under sec.
6662(b)(2).
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