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1996. Respondent also determined a deficiency of $109,242 in
Odd-Bjorn and Lisa L. Huse’s Federal income tax for 1997. The
issue for decision is whether petitioners are entitled to long-
term capital gain treatment for certain amounts received in
connection with the settlement of a lawsuit.
Background
The parties submitted this case fully stipulated pursuant to
Rule 122.1 The stipulation of facts and the attached exhibits
are incorporated herein by this reference. Petitioners Mark J.
and Connie J. Steel resided in Redmond, Washington, when they
filed their petition. Petitioners Odd-Bjorn and Lisa L. Huse
resided in Las Vegas, Nevada, when they filed their petition.2
Mr. Huse, Mr. Steel, and Bjorn Nymark were general partners
in Bochica Partners (Bochica), which was formed on October 28,
1994. Bochica’s partnership agreement states that it was formed
for the purpose of acquiring the stock of Birting Fisheries, Inc.
(BFI). At some point after its formation, Bochica acquired all
the stock of BFI. BFI was a Washington corporation engaged in
commercial fishing operations in the Bering Sea near Alaska and
1Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the tax years in issue,
and all Rule references are to the Tax Court Rules of Practice
and Procedure.
2References to petitioners are to Mr. Steel and Mr. Huse.
Mrs. Steel and Mrs. Huse are parties to these cases by virtue of
the fact they filed joint returns with their husbands for the
years in issue.
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