- 3 -
or 661 were satisfied”. Finally, respondent determined that
Adorno Business 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.2 The
petition was signed by Mr. Adorno as “Edwin R. Adorno
(Director)”.3
Paragraph 4 of the petition, which sets forth the bases on
which the notice of deficiency is challenged, alleges as follows:
(1) Business trust are an acceptable business entity
according to Reg. 301.7701.4(b). (2) Business trust
has a business purpose for profit. * * * (3) Business
deductions are allowed IRC section 661.[4]
2 The principal place of business of Adorno Business was in
Chicago, Ill., at the time that the petition was filed with the
Court.
3 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.
4 A business trust (commonly known as a “Massachusetts
trust”) is an unincorporated business organization created by a
declaration of trust wherein property is conveyed to a trustee to
hold and manage for the benefit and profit of such persons as may
be or become the holders of transferable certificates evidencing
the beneficial interests in the trust estate. State St. Trust
Co. v. Hall, 41 N.E.2d 30, 34 (Mass. 1942). See generally Hynes
v. Commissioner, 74 T.C. 1266 (1980), and cases cited therein for
a discussion on business trusts. The purpose of a business trust
(continued...)
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