-60-
We have found that Robert sold SSC to Maerki. In 1982, SSC
paid $51,923.29 to SSI, of which $1,923.29 was interest. In
1982, SSC paid $10,000 to Robert. On their late-filed 1982 tax
return, petitioners acknowledged $61,923 gain from this
transaction, thereby conceding that they did not have any as-yet-
unrecovered basis in SSC. Also, petitioners do not contend that
they should be taxable on only 76 percent of the SSI receipts,
because of Doyle's 24-percent interest in SSI. Respondent does
not contend that petitioners had any additional income from the
transaction and agrees with petitioners' long-term capital gain
treatment of all but the interest component. We conclude that
the record clearly shows that $1,923.29 of SSC's payment to SSI
was interest, and we have so found. Supra N. Second Sale of
Interest in Structured Shelters of Cincinnati.
We hold for respondent on this issue.
Petitioners failed to file a timely 1982 tax return. In
fact, petitioners' 1982 tax return was filed after the notices of
deficiency were issued in the instant case. In their late-filed
1982 tax return petitioners acknowledged a tax liability of
$3,029. Our findings show that petitioners' 1982 income subject
to tax is far greater than what they reported on their 1982 tax
return.
There is no indication of offsetting deductions or credits.
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