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from payments petitioner Jon L. Stolte1 received under two
disability policies. The resulting deficiencies in income tax,
additions to tax, and penalties are as follows:
Additions to Tax Penalty
Year Deficiency Sec. 6653(a) Sec. 6661 Sec. 6662
1987 $12,472 $624 $3,118
1988 5,371 269 1,343
1989 6,274 $1,255
1990 6,263 1,253
After concessions by petitioners, the sole issue for
decision is whether certain payments received by petitioner may
be excluded from petitioners' gross income under section 105(c).
We hold they may.
Unless otherwise stated, section references are to the
applicable versions of the Internal Revenue Code, and Rule
references are to the Tax Court Rules of Practice and Procedure.
Background
Some of the facts are stipulated and are so found.
Petitioners resided in Bloomfield Hills, Michigan, when they
filed their petition. Petitioner is 64 years old and received
his license as a medical doctor in 1972. Petitioner practiced
medicine as an employee of his wholly owned corporation, Jon L.
Stolte, M.D.P.C. (P.C.), from 1972 through 1990. During most of
1All singular references to petitioner are to petitioner Jon
L. Stolte unless otherwise indicated. Petitioner Esther J.
Stolte is a party to this proceeding due to filing a joint
Federal income tax return with petitioner.
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