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Respondent’s Adjustments
Respondent’s adjustments giving rise to the deficiencies
here in question (sometimes, the deficiencies) result from
respondent’s disallowances of the Vulcan losses and a small
credit (without distinction, the Vulcan losses) claimed on the
joint returns. In the notice, respondent explains the
disallowances as follows:
It is determined that you incurred no deductible loss
for the taxable years 1981 and 1982 from the Vulcan Oil
Technology a partnership in which you own an interest.
It has not been established that the partnership
incurred any loss for the taxable years 1981 and 1982,
nor has it been established that if the partnership did
have a loss for the taxable years 1981 and 1982, that
you are entitled to deduct any portion of that loss on
your income tax return. Accordingly, your taxable
income for the years 1981 and 1982 is increased by
$75,620.00 and $71,078.00.
After the initiation of this action, and following
respondent’s prevailing in certain test cases involving
investments similar to Vulcan (the test cases),5 petitioners
conceded the deficiencies.
The Jonsons
Barbara was born on March 21, 1930. She received an
associate’s degree from Colorado Women’s College in 1949, a
5 On brief, petitioners identify those cases as follows:
Krause v. Commissioner, 99 T.C. 132 (1992), affd. sub nom.
Hildebrand v. Commissioner, 28 F.3d 1024 (10th Cir. 1994); and
Acierno v. Commissioner, T.C. Memo. 1997-441, affd. 185 F.3d 861
(3d Cir. 1999).
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Last modified: May 25, 2011