Richard L. Matz and Linda A. Matz, Deceased, Richard Lee Matz, Jr., Independent Executor - Page 19

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            held for sale in the ordinary course of that trade or business,                             
            or that petitioner was engaged in a trade or business of                                    
            developing and promoting businesses and that Hidden Valley was                              
            held pursuant to that trade or business.  We have already                                   
            rejected these arguments and do not need to address them again in                           
            detail.                                                                                     
                  Accordingly, the $1,643,900 loss petitioners sustained in                             
            1989 relating to Hidden Valley is a long-term capital loss.8                                
                  For the foregoing reasons,                                                            
                                                             Decision will be entered                   
                                                       under Rule 155.                                  
















                  8     Furthermore, in claiming the Hidden Valley loss as                              
            ordinary on their 1989 Federal income tax return, petitioners                               
            assert that there is a resulting net operating loss.  Petitioners                           
            assert that this net operating loss should be carried back to                               
            1986, 1987, and 1988, and applied against the deficiencies                                  
            determined by respondent.  Since we have held that the Hidden                               
            Valley loss is capital, we do not reach this issue.                                         




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