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Rules 180, 181, and 182.1 The Court agrees with and adopts the
opinion of the Special Trial Judge that is set forth below.
OPINION OF THE SPECIAL TRIAL JUDGE
POWELL, Special Trial Judge: Respondent determined a
deficiency in petitioners' 1994 Federal income tax and an
accuracy-related penalty under section 6662(a) in the respective
amounts of $3,784 and $292.60.
The issues are whether petitioners are entitled to a
deduction in the amount of $17,500 under section 179 and whether
petitioners are liable for the accuracy-related penalty under
section 6662(a). At the time the petition was filed in this
case, petitioners resided in Frankfort, Indiana.
The facts may be summarized as follows. Petitioners are the
sole partners in a partnership known as Leddos Frozen Yogurt, LLC
(Leddos) that commenced operations on September 1, 1994. During
1994, Leddos purchased equipment for $26,650. On the partnership
return (Form 1065), Leddos reported the following:
Gross Receipts $20,105
Cost of Goods Sold 22,529
Total Income (loss) (2,424)
The partnership reported total deductions in the amount of
$13,294, and showed a loss in the amount of $15,718. These
figures did not include any deduction for the expense of section
179 property. On Form 4652 (Depreciation and Amortization),
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year at issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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