Greg R. Vinikoor and Melissa D. Vinikoor - Page 18

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          Issue 2.  Investment Interest                                               
               Respondent determined that petitioners were not entitled to            
          deductions for investment interest claimed to have been paid to             
          Drachman for the shares of Price Co. stock transferred to                   
          petitioners on October 30 and December 10, 1987.  Petitioners               
          stipulated that they would not be entitled to claim these                   
          deductions if we found the shares of stock were not bona fide               
          loans.  We have so found.6                                                  
               In addition, there is no evidence to support that any of the           
          claimed interest was ever paid.  Respondent is sustained on this            
          issue.                                                                      
          Issue 3.  Addition to Tax Under Section 6651(a)                             
               Respondent determined an addition to tax under section                 
          6651(a) for delinquent filing of a return.                                  
               Section 6651(a) provides that if a taxpayer fails to file a            
          return by its due date, including extensions of time for filing,            
          there shall be an addition to tax equal to 5 percent of the tax             
          required to be shown on the return for each month the failure to            
          file continues, not to exceed 25 percent.  The addition to tax              
          under section 6651(a) shall not apply, however, if the taxpayer             


               6    The parties stipulated that for 1990 petitioners                  
          claimed $22,800 as investment interest paid to Drachman for the             
          transferred shares of Price Co. stock.  On brief, respondent                
          argues that petitioners are not entitled to claim $20,754 as                
          investment interest paid to Drachman in 1990.  We hold this                 
          $2,046 difference to be a concession by respondent.                         




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