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accuracy-related penalties under section 6662(a).1 The amounts
of these determinations are as follows:
Accuracy-related penalty
Year Deficiency sec.6662(a)
1991 $125,996 - 0 -
1993 69,018 $13,804
1994 581,181 116,236
1995 2,247 449
Following concessions, we must decide:
1. Whether certain transactions increased the basis of
Jerry L. Thomas (Jerry) in two S corporations named Ram
Extrusions, Inc. (Ram), and Innovative Fibers, Inc. (Innovative),
and one limited liability company named Twist-Tex, LLC (Twist-
Tex).
2. Whether certain payments made to Jerry in connection
with his sale of his interest in Conquest Carpet Mills, Inc.
(Conquest), are taxable as capital gains or ordinary income.
3. Whether petitioners are liable for the accuracy-related
penalties respondent determined for 1993 and 1994.
FINDINGS OF FACT
Some facts were stipulated. We incorporate herein by this
reference the parties’ stipulation of facts and the exhibits
submitted therewith. We find the stipulated facts accordingly.
Petitioners are married individuals who filed joint Federal
1 Unless otherwise indicated, section references are to the
Internal Revenue Code in effect for the years in issue. Rule
references are to the Tax Court Rules of Practice and Procedure.
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