Richard Leo Warbus - Page 1

                                   110 T.C. No. 21                                    

                               UNITED STATES TAX COURT                                

                          RICHARD LEO WARBUS, Petitioner v.                           
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 2194-96.                    Filed April 21, 1998.           

                    P, a member of a federally recognized tribe of                    
               American Indians, purchased a boat that he used in                     
               treaty "fishing-rights-related" activity as defined in                 
               sec. 7873, I.R.C.  In 1984, P obtained a commercial                    
               loan for items related to the fishing boat from the                    
               same lender who financed the purchase of the boat.  The                
               loan repayment was guaranteed by the Bureau of Indian                  
               Affairs (BIA).  When P failed to make payments on the                  
               loan as they became due, the lender repossessed and                    
               sold the boat.  In 1993, pursuant to its loan guaranty,                
               the BIA paid to the lender outstanding principal and                   
               interest, which it deemed uncollectible from P.  As a                  
               result of the BIA payment and cancellation of his debt,                
               P enjoyed discharge of indebtedness income in 1993.  P                 
               did not report discharge of indebtedness income,                       
               believing it to be exempt from tax as income from                      
               Indian fishing-rights-related activity as described in                 
               sec. 7873.                                                             

Page:   1  2  3  4  5  6  7  8  9  10  11  12  Next

Last modified: May 25, 2011