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and she was responsible for handling Mr. Von Kalinowski’s
everyday financial affairs. For instance, Ms. Hester received
and deposited Mr. Von Kalinowski’s paychecks, she paid all
routine expenses such as insurance payments, mortgage payments,
and she made the payments due on Mr. Von Kalinowski’s outstanding
loans.
Given the responsibilities undertaken by Ms. Hester,
petitioner’s knowledge of the particulars of her husband’s
finances was limited. Petitioner, however, was aware that Mr.
Von Kalinowski made investment decisions on their joint behalf,
and she allowed him to do so without seeking her approval.
Husband’s Tax Shelter Investments
Respondent determined the deficiencies for the years at
issue based on the distributive shares of the following
partnerships: Diversified Investments Group (Diversified),
Capricorn Company (Capricorn), and Pisces Company (Pisces)
(collectively, the tax shelter investments). Mr. Von Kalinowski
invested approximately $10,000 in Diversified upon the suggestion
of a law partner and following a meeting with Diversified’s
promoter. Mr. Von Kalinowski did not consult petitioner with
respect to this investment.
Mr. Von Kalinowski became interested in Capricorn and Pisces
(the partnerships) when another law partner introduced him to an
individual named Togo Tanaka. In addition to being a member of
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