- 2 -
Additions to tax and penalties
Year Deficiency Sec. 6651(a)(1) Sec. 6661(a) Sec. 6662(a)
1985 $27,673 $3,362 $6,918 --
1987 21,865 2,722 5,466 --
1989 10,017 –- –- $2,003
1990 50,643 10,910 –- 10,129
Respondent filed an amended answer asserting that petitioners’
tax liability is as follows:1
Additions to tax and penalties
Year Deficiency Sec. 6651(a)(1) Sec. 6661(a) Sec. 6662(a)
1985 $27,642 $3,889 $3,888 --
1987 21,865 2,935 2,935 --
1989 10,017 2,420 –- $1,936
1990 50,643 10,911 –- 10,129
After concessions, the issues for decision are:
1. Whether petitioners have a basis of $233,408 in
additions to a building. We hold that their basis in the
additions is $20,000.
2. Whether petitioners have a basis of $130,000 (or any
other amount) in real property for two outdoor advertising signs
on the property. We hold that they do not.
3. Whether the Babcock Road and Warfield Drive properties
qualify under section 1033 as replacement property for property
sold under threat of condemnation. We hold that they do not.
4. Whether petitioner placed certain vehicles in service
when he bought them for his business, as respondent contends, or
when he began to use them in his business, as petitioners
1 Respondent bears the burden of proof with respect to new
matter alleged in the amended answer. Rule 142(a).
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Last modified: May 25, 2011