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The issues for decision are: (1) Whether the notice of
deficiency is entitled to a presumption of correctness; (2)
whether petitioners had ordinary unreported income due to
forgiveness of indebtedness as determined by respondent; (3)
whether petitioners are entitled to a net operating loss
carryover in the amount of $3,992,234; and (4) whether
petitioners are liable for an accuracy-related penalty under
section 6662.
FINDINGS OF FACT
The parties have stipulated some of the facts, which are so
found. The stipulation of facts is incorporated herein by this
reference. When they filed their petition, petitioners were
married and resided in Key Biscayne, Florida. References to
petitioner are to petitioner husband.
Petitioner’s Business Holdings
From 1986 through 1993, petitioner held extensive business
interests, including two solely owned S corporations, Bonnevista
Terrace, Inc. (Bonnevista), and Castle Towers, Inc. (Castle
Towers), which owned and operated mobile home parks in Minnesota
and Indiana. Bonnevista was incorporated on June 30, 1966, and
elected status as an S corporation on July 20, 1966. Castle
1(...continued)
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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