- 16 -
Saztec International Common was paid into the
plan within the meaning of Section 404 of the
Internal Revenue Code.
OPINION
The issue for decision is whether the partnership is
entitled to deduct $16,500 on its 1986 return, pursuant to
section 404(a), for an alleged contribution of stock to a
defined benefit plan established for one of its partners,
Mr. Arland T. Stein. Respondent disallowed the deduction
in the subject notice of FPAA, and the tax matters partner
bears the burden of proving that this adjustment to the
partnership's 1986 return is wrong. Rule 142(a). All Rule
references are to the Tax Court Rules of Practice and
Procedure.
Under section 404(a)(1)(A), contributions to a
qualified plan are deductible only "In the taxable year
when paid". See also secs. 1.404(a)-1(c), 1.404(a)-3(a),
Income Tax Regs. However, section 404(a)(6) provides that
a payment is deemed to have been made on the last day of
the preceding taxable year if it is made on account of
such taxable year and "is made not later than the time
prescribed by law for filing the return for such taxable
year (including extensions thereof)." In this case, the
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NextLast modified: May 25, 2011