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Respondent determined deficiencies of $6,328, $4,018, and
$1,571 in petitioners’ Federal income taxes for tax years 1994,
1995, and 1996, respectively. The issues for decision are:
(1) Whether petitioners’ share of income from a partnership in
1994, 1995, and 1996 is attributable to the rental of property
pursuant to written binding contracts entered into before
February 19, 1988; (2) whether the issue of petitioner Steven D.
Kucera’s (petitioner) participation in Business Management
Services, Inc. (BMS) is properly before the Court; and
(3) if so, whether petitioner materially participated in BMS such
that the rental income attributable to BMS should not be subject
to the recharacterization rule of section 1.469-2(f)(6), Income
Tax Regs.
Background
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by reference. Petitioners resided in Grand
Island, Nebraska, at the time the petition was filed in this
case.
Petitioner is a certified public accountant and has been
during all years relevant in this case. Petitioner prepared
joint Forms 1040, U.S. Individual Income Tax Returns, for himself
and his wife, Teresa M. Kucera, for each of the years at issue.
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