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On February 28, 1980, the Alexanders filed a timely petition
with the Court, assigned docket No. 2758-80, contesting the
notice of deficiency for 1974 and 1975.
2. 1976 and 1977
Respondent also examined the Alexanders' joint income tax
returns for 1976 and 1977. On April 17, 1986, respondent issued
the Alexanders a notice of deficiency determining deficiencies in
and additions to their 1976 and 1977 Federal income taxes, as
follows:
Additions to Tax
Year Deficiency Sec. 6653(a)
1976 $3,596 $180
1977 876 44
Respondent also determined that the Alexanders were liable for
increased interest for 1976 pursuant to section 6621(c).
The deficiencies that respondent determined against the
Alexanders for 1976 and 1977 resulted, in part, from respondent's
disallowance of interest deductions of $8,665 and $12,993,
respectively, attributable to their participation in Kersting
programs for those years. Respondent also disallowed a $5,149
partnership loss claimed by the Alexanders for 1976 on their
investment in the Avista Epsilon and Sarbonne partnership.
On July 21, 1986, the Alexanders filed a petition through
Mr. Kersting's office, assigned docket No. 30413-86, contesting
the notice of deficiency for 1976 and 1977.
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