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Ronald D. Ciaravella
Accuracy-Related Penalty
Year Ended Deficiency Sec. 6662(a)
12/31/92 1-0- -0-
12/31/93 $39,512 $7,902
1 Respondent's disallowance of deductions for trade or
business expenses claimed by Mr. Ciaravella in connection with
race car activities would not result in taxable income for 1992
but would eliminate the net operating loss carryover from 1992
that Mr. Ciaravella claimed on his 1993 income tax return.
Icarus, Inc.
Year Ended Deficiency
8/31/91 $10,210
8/31/92 5,546
8/31/93 15,002
All section references are to the Internal Revenue Code as
in effect for the taxable years in issue, and all Rule references
are to the Tax Court Rules of Practice and Procedure.
After concessions,1 the issues for decision are as follows:
(1) Whether and to what extent Icarus, Inc. (Icarus) is
entitled to deduct expenditures related to race car activities in
computing the taxable income shown on its consolidated returns
for fiscal years ended August 31, 1991, 1992, and 1993.
1 Respondent concedes that Icarus, Inc., is entitled to
deduct $11,644 of the $91,644 claimed as advertising expenses for
FYE Aug. 31, 1993. Respondent also concedes that Mr. Ciaravella
is entitled to IRA deductions of $2,000 for each of the years
1992 and 1993. Any adjustments to petitioners' deficiencies and
penalty by reason of the foregoing concessions would be made in
the Rule 155 computations.
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