Ivor F. and Debra A. Benci-Woodward, et al. - Page 6

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          and certain other miscellaneous items.  The $881,226.03 was                 
          disbursed by Howard to Ragatz out of the trust account.                     
               The details of the disbursement to Mangum are not in the               
          record.                                                                     
               Petitioners did not report their punitive damages awards as            
          taxable income on their respective 1992 tax returns, although the           
          Benci-Woodwards and the Mangums disclosed the awards on their               
          returns.  In addition, petitioners did not report in full their             
          interest on punitive damages on their respective 1992 returns.              
               Respondent timely issued notices of deficiency to                      
          petitioners.  Among other adjustments, respondent determined that           
          punitive damages and related interest were fully includable in              
          petitioners' gross income pursuant to section 61.  Petitioners              
          have since conceded that their punitive damages, and related                
          interest, are includable in gross income in the amounts                     
          determined by respondent.  See O'Gilvie v. United States, 519               
          U.S. 79 (1996).                                                             
               Respondent also determined that the Benci-Woodwards, the               
          Mangums, and the Ragatzes were entitled to miscellaneous itemized           
          deductions, subject to the 2-percent floor provided by section              
          67(a), for attorney's fees and costs attributable to the punitive           
          damages awards in the amounts of $670,135, $626,448, and                    
          $609,767, respectively.  However, for AMT purposes, respondent              







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