Investment Research Associates - Page 356




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          sold to a related party after May 14, 1980?).  And there is no               
          evidence as to whether the balloon payments due on July 11, 1993             
          (representing $747,000 of the total $947,000 sales price), were              
          ever made, received or reported.                                             
               Accordingly, we sustain respondent's determination that                 
          Kanter had an additional net long-term capital gain of $378,800              
          in 1983 resulting from the installment sale of stock by the                  
          grantor trusts.                                                              
          Issue 11.  Whether Kanter Is Entitled to Research and Development            
          and Business Expense Deductions From Immunological Research                  
          Corporation for 1979                                                         
                                   FINDINGS OF FACT                                    
               On their Federal income tax returns for 1979 through 1982,              
          the Kanters claimed $311,478, $10,962, $711, and $1,590 as                   
          Kanter's distributive share of losses from Immunological Research            
          Corp. (IRC), an S corporation, allocable to three grantor trusts,            
          for which Kanter was the deemed owner; namely, Tablet Trust,                 
          Capsule Trust, and Liquid Trust.                                             
               Although respondent issued notices of deficiency to Kanter              
          for the years 1979 through 1982, respondent did not disallow the             
          losses claimed by Kanter from IRC in the notices of deficiency.              
          However, in an Amendment to Answer in docket No. 3456-88,                    
          respondent affirmatively alleged that Kanter's claimed loss in               
          the amount of $311,478 for 1979 was not allowable.  Respondent               
          also asserted that any underpayment from the claimed loss from               






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