- 3 -
Specifically, we must determine (1) with respect to the corporate
petitioner, whether the expenses associated with the Rolls Royce
are deductible,2 and (2) with respect to the individual
petitioners, whether the use of the Rolls Royce by Mohan Roy
constitutes a constructive dividend. In addition, we must
determine whether the corporate and individual petitioners are
liable for the accuracy-related penalty pursuant to section 6662.
All section references are to the Internal Revenue Code as in
effect for the years in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. The
stipulation of facts and the attached exhibits are incorporated
herein by this reference.
At the time of the filing of the petitions, Roy, Inc.'s
principal place of business was located in Anaheim, California, and
Mohan and Vimal Roy, husband and wife, resided in Newport Beach,
California.
Mohan Roy is a cardiovascular surgeon; Vimal Roy is an
anesthesiologist. The Roys conduct their respective medical
2 The corporate petitioner also raises as an issue its
entitlement to alter its depreciation method under the Modified
Accelerated Cost Recovery System (MACRS) with respect to the
Rolls Royce. Because we hold that the corporate petitioner
failed to prove its entitlement to any deduction for the Rolls
Royce expenses, we need not decide whether it can change
depreciation methods.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011