- 3 -
Schedule E rental activity was entered into for profit
for the taxable year 1998.
Respondent determined that “the trust arrangement involving the
following trust [Adorno Business Company, Taxpayer Identification
Number 36-7141570] is a sham with no economic substance and is
disregarded for federal income tax purposes”. Respondent also
disallowed the income distribution deduction claimed by Adorno
Asset because it “failed to establish the requirements for
deduction of IRC sections 651 or 661 were satisfied”. Finally,
respondent determined that Adorno Asset is liable for an
accuracy-related penalty due to negligence or disregard of rules
and regulations, a substantial understatement of income tax, or a
substantial valuation overstatement.
B. Petition
The Court subsequently received and filed a petition for
redetermination challenging the notice of deficiency.3 The
petition was signed by Mr. Adorno as “Edwin R. Adorno
(Director)”.4
3 The principal place of business of Adorno Asset was in
Chicago, Ill., at the time that the petition was filed with the
Court.
4 Use of the terms “director” and “executive director” in
this opinion is intended for narrative convenience only. Thus,
no inference should be drawn from our use of such terms regarding
any legal status or relationship.
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Last modified: May 25, 2011