- 17 -
reported by Zila,20 and the additional discount for restrictions
on stock taken by petitioner (marketability discount). The
schedule contained the following statement concerning the
marketability discount:
THIS DISCOUNT TAKEN BECAUSE TAXPAYER FEELS THAT STOCK
WOULD BE SEVERELY EFFECTED IF HE PUT ALL THESE SHARES
ON MARKET IN ONE BLOCK. IN ADDITION TAXPAYER CANNOT
SELL SHARES FOR THESE YEARS PER SEC REGULATIONS.
THEREFORE, PRESENT VALUE IS LESS.
Petitioner, however, did not make the disclosure on Form 8275,
Disclosure Statement, or Form 8275-R, Regulation Disclosure
Statement. Petitioner and respondent have agreed that petitioner
is entitled to only a single discount of $282,979.
C. Medical Practice
From 1989 through 1998, petitioner reported income and
losses from his medical practice as follows:
Year Income (Loss)
1989 ($10,617)
1990 (15,235)
1991 (3,732)
1992 12,738
1993 36,723
1994 20,574
1995 10,547
1996 8,151
1997 5,449
1998 7,689
20The additional schedule indicated the amount of
petitioner’s ordinary income as “ORDINARY INCOME-1099". We
assume this indicates that petitioner’s ordinary income was
reported on Form 1099.
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