- 586 -
Our findings and conclusions with respect to the following
issues clearly show that portions of Kanter's underpayments of
income taxes were attributable to negligence or intentional
disregard of rules or regulations to the extent the 1986 through
1989 tax years are involved: (1) Commitment fees received by
Century Industries (Issue 2); (2) income of the Bea Ritch Trusts
(Issue 4); (3) interest deduction for 1986 (Issue 17); and (4)
capital gains and losses (Issue 21). Also, Kanter conceded some
adjustments but failed to address the additions to tax for
negligence with respect thereto. Unlike the underpayments
attributable to fraud with respect to the "Prudential Issues" or
"The Five", only the negligence additions to tax apply to these
issues. See sec. 6653(a)(2); sec. 6653(b)(2).
Issue 34. Whether the Kanters Are Liable for the Section 6659
Addition to Tax for 1981
OPINION
This issue relates to the Kanters' liability for the
addition to tax under section 6659 for substantial valuation
overstatement with respect to a $4,283 loss claimed from GLS
Associates on their 1981 income tax return. We sustained
respondent's disallowance of this loss (Issue 13). On their 1981
return, the Kanters also claimed an investment interest expense
deduction relating to GLS Associates in the amount of $45,095,
which respondent disallowed in the notice of deficiency. In a
Stipulation of Settled Issues dated April 12, 1990, the Kanters
Page: Previous 576 577 578 579 580 581 582 583 584 585 586 587 588 589 590 591 592 593 594 595 NextLast modified: May 25, 2011