- 2 -
6662(a) in the amounts of $14,495 and $79,830, respectively.
The issues remaining for decision are:
(1) Is petitioner entitled to deduct for the year at issue a
claimed royalty expense in the amount of $1,158,084? We hold
that it is not.
(2) Is petitioner liable for the year at issue for the
accuracy-related penalty under section 6662(a)? We hold that it
is.
FINDINGS OF FACT2
Some of the facts have been stipulated and are so found.
Petitioner had its principal place of business in Marina del
Rey, California, at the time the petition was filed.
Petitioner, which was incorporated on July 1, 1988, used the
accrual method of accounting for its taxable year ended January
31, 1994, the year at issue. A. Glenn Braswell (Mr. Braswell)
owned all of the stock of petitioner. He also owned all of the
stock of certain other corporations.3 (We shall refer to some or
1(...continued)
effect for the year at issue. All Rule references are to the Tax
Court Rules of Practice and Procedure.
2Unless otherwise indicated or needed for clarity, our
Findings of Fact and Opinion pertain to Feb. 9, 1999, the date of
the trial in this case, and not to petitioner’s taxable year
ended Jan. 31, 1994, the year at issue. In this regard, the
record is poorly developed as to relevant facts pertaining to the
year at issue.
3Mr. Braswell’s spouse owned one share of stock in one of
(continued...)
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011