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Penalty
Docket No./Year Deficiency Sec. 6662(a)
Docket No. 7321-00
1996 $186,324 $37,264.80
1997 53,547 10,709.40
Docket No. 7334-00
1996 235,290 47,058.00
1997 59,632 11,926.40
The issues to be decided2 are:
1. Whether payments by Ray Bitker & Sons partnership (the
Bitker partnership) on petitioners’ debts should be characterized
(for tax purposes) as rental expenses of the Bitker partnership or
constructive partnership distributions to petitioners;
2. whether petitioners received distributions from the Bitker
partnership in 1996 and 1997 that exceeded their bases in the
Bitker partnership; and
3. whether petitioners are liable for accuracy-related
penalties under section 6662(a) for the years at issue.
1(...continued)
references are to the Tax Court Rules of Practice and Procedure.
2 Other adjustments that respondent made to petitioners’
1996 and 1997 returns are computational; the resolution with
respect to these adjustments depends on our determination of the
issues for decision.
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Last modified: May 25, 2011