George C. Scrimshaw and Erna C. Scrimshaw - Page 3

                                         -3-                                          
          remained at home to take care of their children until January 1987,         
          when she resumed her nursing career.                                        
               Petitioners filed joint Federal income tax returns for years           
          1975 through 1979.  On December 3, 1981, respondent sent                    
          petitioners a notice of deficiency regarding these years.  Pursuant         
          to the notice of deficiency, respondent disallowed losses and               
          deductions petitioners claimed on their 1975-79 returns and                 
          determined negligence additions to tax for 1976-79.  Respondent's           
          adjustments were made with regard to the losses and deductions              
          petitioners claimed for 1975-79, arising from transactions                  
          involving: (1) Investors Mining Program 77-5 in 1977 and 1978; (2)          
          commodity options and futures contracts with Gardner Lohmann                
          Limited and Amalgamated Metal Trading Limited in 1976 and 1977;2            
          and (3) investments with Six Star Cablevision Management Corp. in           
          1978 and 1979.  (Petitioners' 1975 tax year was involved because of         
          the disallowance of an investment credit claimed to have been               
          generated in 1979 and carried back to 1975.)                                
               On February 12, 1982, petitioners filed a petition in this             
          Court, disputing respondent's adjustments in the notice of                  
          deficiency and claiming that the period of limitations had expired          
          for petitioners' 1975-77 tax years.                                         



               2    Respondent and the Court treated the options and                  
          futures contracts with Gardner Lohmann Limited and Amalgamated              
          Metal Trading Limited as part of the "London Options" tax shelter           
          project.                                                                    




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