Wade H. Griffin, III - Page 10




                                       - 10 -                                         
               Petitioner’s Federal income tax returns, beginning in 1985             
          or 1986, were prepared by Von A. Gammon (Gammon), who at the time           
          he prepared petitioner’s 1994 return had been practicing                    
          accounting for 10 years.  Gammon was not aware that HGTG had                
          filed a 1994 return.  Gammon also knew that petitioner had an               
          unused loss carryover of $200,000 in connection with HGTG because           
          petitioner did not have sufficient basis to claim the loss.                 
          Because of Gammon’s knowledge of HGTG’s creditors and outstanding           
          debt, he believed that any 1994 return for HGTG would show                  
          losses, which petitioner could not claim because he did not have            
          sufficient basis.  Accordingly, no income or loss from HGTG was             
          reflected on petitioner’s 1994 return.  Based on his above                  
          understanding, Gammon did not inquire about the status of HGTG’s            
          1994 taxable year or whether a return was to be or had been                 
          filed.  Petitioner’s stock in HGTG was worthless as of December             
          31, 1994.                                                                   
                                       OPINION                                        
               The issues for our consideration in this case require an               
          analysis of whether any portion of the settlement proceeds                  
          received by petitioner or on his behalf may be excluded from                
          petitioner’s gross income.  First, we consider whether any                  
          portion is excludable under section 104(a)(2).  If some portion             
          is includable, we shall then consider whether petitioner was                








Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011