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The issues for decision are:1 (1) Whether petitioner's
automobile drag racing activity was engaged in with the intent to
make a profit. We hold it was not. (2) Whether long-term
disability payments received by petitioner in taxable years 1995
and 1996 are includable in gross income. We hold they are. (3)
Whether individual retirement account (IRA) distributions
received by petitioner in taxable years 1995 and 1996, as well as
pension and annuity distributions received by petitioner in
taxable year 1996, are includable in gross income. We hold they
are. (4) Whether petitioner is liable for the 10-percent
additional tax under section 72(t)2 on IRA distributions totaling
$37,500 and $29,500 in taxable years 1995 and 1996, respectively.
We hold he is. (5) Whether petitioner is liable for an accuracy-
related penalty pursuant to section 6662(a) for taxable years
1995 and 1996. We hold he is.
1The notice of deficiency contains adjustments to itemized
deductions for taxable years 1995 and 1996 and disallows a net
operating loss carryback to 1992 related to the operations of
petitioner's automobile drag racing activity in 1995. These are
computational adjustments which will be affected by the outcome
of the issues to be decided, and we do not separately address
them.
2Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years at issue.
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