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OPINION OF THE SPECIAL TRIAL JUDGE
PANUTHOS, Chief Special Trial Judge: Respondent determined
deficiencies in and additions to petitioners' Federal income
taxes as follows:
Additions to Tax
Year Deficiency Sec. 6653(a)1 Sec. 6661
1978 $115,780 $5,789.00 --
1979 143,636 7,181.80 --
1980 115,213 5,760.65 --
1981 51,489 2,574.45 --
1982 149,866 7,493.30 $37,466.50
1 For returns required to be filed after Dec. 31, 1981, if the
addition to tax under sec. 6653(a)(1) applies, the addition to
tax under sec. 6653(a)(2) will also apply in an amount to be
determined.
Respondent also determined that, once the deficiencies are
determined, petitioners are liable for increased interest on
underpayments attributable to a tax-motivated transaction as
defined in section 6621(c).
The deficiencies in this case result from respondent's
disallowance of certain losses. The losses include those
attributable to petitioners' participation in the "Arbitrage and
Carry" gold trading promoted by Futures Trading, Inc. (FTI). The
losses also include those attributable to petitioners'
participation in the Treasury bill (T-bill) option and stock
forward transactions promoted by Merit Securities, Inc. (Merit),
a company that is related to FTI.
The parties have stipulated that--
All adjustments * * * relating to the T-Bill Options
and the Stock Forward Contracts programs promoted by
Merit shall be redetermined in the same manner as
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