- 2 -
The issues for our consideration are: (1) Whether
petitioners’ 1991, 1992, and 1993 income was underreported in the
amounts of $28,195, $22,695, and $74,013, respectively; (2)
whether petitioners are entitled to a 1992 bad-debt deduction
under section 166;1 (3) whether petitioners are entitled to a
1992 casualty loss deduction under section 165; (4) whether
petitioners’ 1992 gain from the sale of Glenwood Wrecker Service
was understated in the amount of $10,635; and (5) whether
petitioners are liable for the accuracy-related penalty under
section 6662(a) for the 1991, 1992, and 1993 tax years.
FINDINGS OF FACT2
When their petition was filed, petitioners Glenn H. and
Diane J. Flood resided in Chatsworth, Georgia. Glenn H. Flood
(petitioner) owned two businesses during the years in question,
Flood’s Auto Parts (FAP) and Glenwood Wrecker Service (Glenwood).
FAP
During the tax years in issue petitioner owned and operated
FAP, a sole proprietorship located in Chatsworth, Georgia. FAP
consisted of the wholesale and retail sale of auto parts, a
wrecker service, and the sale of junk cars to a scrap metal
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the taxable periods under
consideration, and all Rule references are to the Tax Court Rules
of Practice and Procedure.
2 The parties’ stipulation of facts and exhibits is
incorporated herein by this reference.
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