Victor M. Bello - Page 2




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                                        Accuracy-Related Penalty                      
                    Year      Deficiency      Sec. 6662(a)                            
                    1992      $57,466              $11,493                            
                    1993      39,669         7,934                                    
                    1994      7,161          1,432                                    
                    1995      36,098              7,220                               
               After concessions, the issues for decision are:                        
               (1) Whether petitioner is entitled to deduct trade or                  
          business expenses under section 162 with respect to his Villa Del           
          Mar hotel venture for 1992, 1993, 1994, and 1995.  We find he is            
          entitled to deduct some of the expenses.                                    
               (2) Whether petitioner is entitled to a claimed loss                   
          deduction for 1992 from Amazona Enterprises, Inc. (Amazona), his            
          wholly owned S corporation.  We find that he is not.                        
               (3) Whether petitioner is entitled to claimed partnership              
          loss deductions for 1992 and 1994 from Roadmaster Leasing.  We              
          find that he is not.                                                        
               (4) Whether petitioner is liable for an accuracy-related               
          penalty under section 6662(a) for substantial understatement of             
          income tax for 1992, 1993, 1994, and 1995.  We hold that he is              
          liable for a penalty in 1992 for the understatement attributable            
          to his disallowed Villa del Mar business expenses and his                   
          disallowed loss deductions from Amazona and Roadmaster Leasing,             
          in 1993 for the understatement attributable to his disallowed               
          Villa del Mar business expenses, and in 1995 for his disallowed             
          Villa del Mar business deductions.                                          





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