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unsubstantiated bad debts for the taxable year.
Respondent concedes this adjustment.
3. Respondent disallowed $140,873 of petitioner’s
reported interest expense deduction for 1993 to
reflect unsubstantiated interest expenses for the
taxable year. Petitioner concedes that
adjustment, to the extent of $142,214.
a. As a mathematical computation, petitioner’s
concession is in excess of that which
respondent determined was unsubstantiated.
The parties stipulated, however, that
$19,105 is properly at issue.
b. Respondent concedes that portion of the
$19,105 paid which constitutes a safe-haven
rate of interest calculated, pursuant to
sec. 482 and the regulations thereunder, on
the underlying loan, to the extent that
portion exceeds the amount paid on that
underlying loan already allowed as an
interest expense on the underlying loan
($895).
4. Petitioner claimed a net operating loss for 1994
and carried a loss back to 1993. Petitioner
concedes it was not entitled to claim a net
operating loss in 1994 or carry a loss back to
1993.
5. Respondent recomputed petitioner’s environmental
tax and environmental tax deduction. Petitioner
presented no argument regarding this
recomputation, and we deem petitioner to have
conceded this adjustment.
6. Respondent determined petitioner was liable for a
civil fraud penalty for 1993 in the amount of
$13,428 pursuant to sec. 6663. Respondent
concedes that determination.
7. Respondent determined petitioner was liable for a
penalty for 1993 pursuant to sec. 6662(a) for
substantial understatement of tax. Petitioner
presented no argument regarding the penalty. We
deem petitioner to have conceded the application
of the penalty.
III. Docket No. 20254-94, June Cordes:
A. 1989:
1. Respondent determined petitioner was allowed a
deduction for 1989 for a personal exemption in the
amount of $2,000. Petitioner did not dispute this
determination, and we deem petitioner to have
conceded this adjustment.
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