Respondent determined a deficiency in petitioner's 1993 Federal income tax in the amount of $4,422, an addition to tax under section 6651(a) in the amount of $3, and an accuracy- related penalty under section 6662(a) in the amount of $884. The issues for decision are: (1) Whether petitioner is entitled to a deduction for a loss from an S corporation; and (2) whether the understatement, if any, of tax required to be shown on petitioner's 1993 Federal income tax return was due to his negligence or disregard of rules or regulations. The resolution of the first issue depends upon whether a valid S corporation election was filed by the corporation to which the loss is attributable. FINDINGS OF FACT Some of the facts have been stipulated and are so found. Petitioner filed an untimely Federal income tax return for the year 1993, on May 6, 1994. At the time the petition was filed, he resided in Westlake, Ohio. In 1992 petitioner established and incorporated under Ohio law Fankhauser Management, Inc. (Management). Petitioner was the sole shareholder of Management during all relevant periods. Management was formed in order to operate a teenage activity center. Although there is conflicting evidence on the precise date, it appears that the business of Management began in January 1993.Page: Previous 1 2 3 4 5 6 7 8 9 Next
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