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The total amounts of imputed interest determined by
respondent for petitioner’s 1994 and 1995 fiscal years were
$48,959 and $49,836, respectively. In his reply brief,
respondent provides a second computation of imputed interest for
the 1994 and 1995 calendar years in the aggregate amounts
(including interest on both direct and indirect loans) of $19,476
and $59,832, respectively. In that regard, respondent concedes
in his reply brief that “Forgone interest is treated as
transferred by the borrower to the lender as interest on the last
day of the calendar year. I.R.C. � 7872(a)(2)”.
Accordingly, respondent concedes that his notice
determination amounts were not correctly computed. The proposed
corrected computations result in a substantially reduced interest
amount for petitioner’s 1994 tax year from $48,959 to $19,476 and
an increased interest amount for petitioner’s 1995 tax year from
$49,836 to $59,832. With respect to respondent’s concessions,
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