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this Court in Janow v. Commissioner, T.C. Memo. 1996-289 (Janow
I).)
Petitioners resided in West Nyack, New York, when their
petition was filed.
During 1980, Hugh Janow (petitioner) was a general partner
in a limited partnership, Federal Arbitrage Company (Federal).
Federal is one of several partnerships that comprise respondent's
Arbitrage Management National Tax Litigation Project. Petitioner
is also a practicing member of the Bar of this Court.
For taxable year 1980, petitioner received a Schedule K-1
from Federal reflecting his distributive share of items of
partnership income and loss, reported by Federal. The Schedule
K-1 shows that petitioner received $20,000 as a guaranteed
payment in that year.
On Schedule E of their 1980 Federal income tax return,
petitioners reported, with respect to Federal, a loss in the
amount of $130,260. Petitioners also reported the $20,000
guaranteed payment received by petitioner in that year.
In the explanation of adjustments attached to the notice of
deficiency, respondent used petitioners' partnership loss as
reported on their 1980 return to make an adjustment. Respondent
did not make any determinations or adjustments with regard to the
guaranteed payment petitioner received from Federal in 1980 and
reported on petitioners' return for that year.
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