- 4 - deficiency did not expire before the affected item deficiency notice was issued. Id. at 557. We concluded that a Rule 155 computation was needed to consider whether a $2,000 credit petitioners are entitled to for their inclusion of $2,000 of COD income reported on their 1992 income tax return (the $2,000 credit) and other items reported on petitioner’s 1992 Schedule K- 1 received from Finley Kumble had properly been given effect in computing the deficiency. Id. at 558-559, 564. As part of respondent’s Rule 155 computation, Form 5278, Statement-Income Tax Change, states petitioner’s “Adjustment to Income” for partnership items of Finley Kumble as “Finley Other Income” of $34,332. Respondent’s Form 4549-CG, Income Tax Examination Changes, attached to the statutory notice of deficiency, recited “Finley Other Income $36,332.” Respondent’s computation has given proper effect to the $2,000 of COD income reported on petitioners’ 1992 return. The first page of Finley Kumble’s 1992 Form 1065, U.S. Partnership Return of Income, at line 7, Other income (loss), referenced “SEE STATEMENT 1”, which was a Form 8275, Disclosure Statement, containing an Item 2 “CANCELLATION OF INDEBTEDNESS $55,777,452”. Petitioner’s 1992 Schedule K-1 indicated he had a 0.0170-percent interest in Finley Kumble’s profits and losses, and a 0.0345-percent interest in capital. The Schedule K-1 also indicated that petitioner had a yearend negative capital account.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011