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all Rule references are to the Tax Court Rules of Practice and
Procedure.
After concessions, the issues for decision are: (1) Whether
Lakeview Automotive, Inc., an S corporation wholly owned by
petitioner, is entitled to a deduction for a bad debt loss under
section 166 or, in the alternative, a theft loss under section
165; (2) whether Lakeview Automotive, Inc., is entitled to a
deduction for a claimed rental expense; (3) whether Lakeview
Automotive, Inc., is entitled to a deduction for legal fees
incurred in defending a suit brought by a former shareholder;
(4) whether Lakeview Automotive, Inc., is entitled to deductions
for amounts expended for a fence gate, roof work, and computer
equipment; and (5) whether petitioner is liable for an accuracy-
related penalty under section 6662(b)(2).
FINDINGS OF FACT1
At the time the petition in this case was filed, Dennis W.
Stark (petitioner) resided in Harrison Township, Michigan.
Petitioner was the president and sole shareholder of Lakeview
Automotive, Inc. (Lakeview), an automotive parts wholesaler.
Lakeview was originally formed as a partnership by petitioner's
father, William Stark (William), and William's brother-in-law.
Lakeview's operations were conducted from real property at 6841
1 Some of the facts have been stipulated and are so found.
We incorporate by this reference the stipulation of facts, the
supplemental stipulation of facts, and attached exhibits.
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