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penalties for tax years ending May 31, 1990, 1991, and 1992 as
follows:
Best Auto Sales, Inc.
Accuracy-
Related Penalty
Year Ending Deficiency Sec. 6662(a)
May 31, 1991 $79,787 $15,957
May 31, 1992 15,413 –-
ABC Autos, Inc.
Accuracy-
Related Penalty
Year Ending Deficiency Sec. 6662(a)
May 31, 1990 $97,851 $19,570
May 31, 1991 58,432 11,686
May 31, 1992 81,560 16,312
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
The primary issues for decision are:
(1) Whether petitioners are entitled to bad debt deductions
with respect to certain automobile loans;
(2) Whether petitioner ABC Autos, Inc., is entitled under
sections 1.471-2(c) and 1.471-4(c), Income Tax Regs., to claimed
write-downs of its used automobile inventory to the lower of cost
or market; and
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