- 12 - ownership of those assets to the corporation.13 On its 1991 Form 1120S, Blue Ribbon also reported a section 1231 loss on the destruction of Mr. Abbene's horse, Magic Moment, in the amount of $2,880. Petitioners reported combined gross income of $134,629 for 1990, $112,136 for 1991, and $110,245 for 1992. Petitioners claimed losses in the amounts of $58,809, $57,799, and $61,017 for 1990, 1991, and 1992, respectively, as Mr. Abbene's distributive share of Blue Ribbon's operating losses.14 For 1991, petitioners also claimed $2,880, as Mr. Abbene's distributive share of the section 1231 loss Blue Ribbon claimed on the destruction of Magic Moment. 13 Mr. Abbene indicated at trial that Blue Ribbon did not own the assets used in its operations and for which it claimed depreciation deductions during the years in issue. Accordingly, at the close of trial, respondent made an oral motion pursuant to Rule 41(b) to amend the pleadings to conform to the evidence in order to assert, in the alternative, that petitioners are not entitled to claim losses in connection with the operation of Blue Ribbon to the extent that such losses represent depreciation deductions. We denied respondent's motion on the grounds that the depreciation issue was not tried by either express or implied consent of the parties. Rule 41(b). Consequently, the issue of whether Blue Ribbon was entitled to depreciation deductions in connection with the assets owned by Mr. Abbene, but used in its operations, is not properly before the Court, and is not considered in this opinion. 14 Petitioners claimed a loss from the operation of Blue Ribbon in the amount of $62,638 for 1993. Petitioners claimed no losses from the operation of Blue Ribbon for 1994, 1995, or 1996. While the record discloses a loss of $59,714 for 1994, there is no evidence of the amount of income or loss from the operation of Blue Ribbon for 1995 or 1996.Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
Last modified: May 25, 2011