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Additions to tax and penalties
Sec. Sec. Sec.
Year Deficiency 6651(a)(1) 6654 6662(a)
1991 $146,062 $15,132 $10,810 $29,212
1992 100,517 8,041 4,384 20,103
1993 405,936 38,703 4,837 81,187
1994 134,217 15,582 10,107 26,843
Following concessions,2 the issues for decision are:3
(1) Whether petitioner’s mining activity for 1991, 1992,
1993, and 1994 constituted an activity engaged in for profit
within the meaning of section 183; and
(2) whether petitioner is liable for the accuracy-related
penalty due to negligence under section 6662(a) for each year in
issue.
2In a Stipulation of Settled Issues filed with the Court,
the parties agreed: (1) Petitioner’s claims of alimony paid in
1991 and 1992 were overstated by $57,595 and $600, respectively;
(2) petitioner understated capital gain in 1992 by $23,380; (3)
petitioner understated royalty income from Zila, Inc., in 1992 by
$3,726; and (4) petitioner is not liable for additions to tax
pursuant to sec. 6651(a)(1) or sec. 6654, as determined in
respondent’s notices of deficiency, for 1991, 1992, 1993, and
1994. In a second Stipulation of Settled Issues filed with the
Court, the parties agreed: (1) In 1991, petitioner was entitled
to claim a net operating loss deduction of $128,461 instead of
the $23,995 originally claimed; (2) in 1993, petitioner
originally claimed a net operating loss carryforward deduction of
$101,898, and the parties agreed there is no net operating loss
carryforward available for deduction, unless and except to the
extent any determination by the Court with respect to the
Schedule C mining activity in 1991 or 1992 results in a
carryforward of net operating loss; and (3) in 1993, petitioner
understated ordinary income from the exercise of stock options in
Zila, Inc., by $282,979.
3The only other issues for decision are computational.
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