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effect for the years in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure.
Respondent determined deficiencies in petitioners’ Federal
income taxes of $5,132, $3,941, and $2,878 for the taxable years
1995, 1996, and 1997, respectively.
The issues for decision are: (1) Whether petitioners are
entitled to offset capital gain income with a capital loss
carryover in each of the years in issue; (2) whether petitioners
are entitled to a deduction for mortgage interest in an amount
greater than that determined by respondent for 1996; (3) whether
petitioners are entitled to miscellaneous itemized deductions in
amounts greater than those determined by respondent, namely (a)
for investment expense of $29,103 in 1995, and (b) for certain
legal expenses in each of the years in issue; (4) whether and to
what extent petitioners received unreported pension or annuity
income in 1996; and (5) whether petitioners are entitled to
deduct an IRA contribution for petitioner wife in 1996. All
remaining adjustments in the notice of deficiency are in
petitioners’ favor, have been conceded by petitioners, or are
computational and will be resolved by the Court’s holding on the
issues.1
1In their petition, petitioners state that they made a
payment of $831 for 1997 which was “ignored” by the Internal
Revenue Service. However, the record shows that this payment was
in fact credited to an assessment of the same amount, an
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Last modified: May 25, 2011