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OPINION
LARO, Judge: This case was submitted to the Court without
trial pursuant to Rule 122(a). John J. Reichel petitioned the
Court to redetermine a 1993 income tax deficiency of $32,887 and
a $6,577 accuracy-related penalty under section 6662(a).
Respondent reflected this determination in a notice of deficiency
issued to petitioner on September 5, 1997.
Following concessions by the parties, we must decide whether
section 263A requires petitioner to capitalize real estate taxes
he paid in 1993 on land he purchased for development. We hold it
does. Unless otherwise indicated, section references are to the
Internal Revenue Code in effect for the year in issue, and Rule
references are to the Tax Court Rules of Practice and Procedure.
Dollar amounts are rounded to the nearest dollar.
Background
All facts have been stipulated and are so found. The
stipulation of facts and the exhibits submitted therewith are
incorporated herein by this reference. Petitioner lived in
Irvine, California, when he petitioned the Court.
Petitioner has been a real estate developer since 1989.
In 1993, he operated his development business as a sole
proprietorship under the name Sunwest Enterprises (Sunwest). He
reported Sunwest's income and expenses on Schedule C, Profit or
Loss From Business (Sole Proprietorship).
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Last modified: May 25, 2011