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MEMORANDUM FINDINGS OF FACT AND OPINION
GALE, Judge: By separate notices of deficiency, respondent
determined the following deficiencies and penalties with respect
to petitioners' Federal income taxes:
Indeck Energy Services, Inc. and Subsidiaries
docket No. 21586-97
Penalty
Year Deficiency Sec. 6662(a)
FYE 11/30/93 $1,542,339 $231,108
FYE 11/30/94 4,994,929 999,468
FYE 11/30/95 536,715 107,343
Michael P. and Maya Polsky
docket No. 23943-97
Penalty
Year Deficiency Sec. 6662(a)
CY 1994 $660,910 $132,182
These cases were consolidated for trial, briefing, and
opinion. After concessions, we must decide the following issues:
(1) Whether $4,856,922 of a $19,886,922 settlement payment
made by petitioner Indeck Energy Services, Inc. (Indeck), to
petitioner Michael P. Polsky (Mr. Polsky) on May 16, 1994,
constitutes interest deductible by Indeck and recognizable as
ordinary income by petitioners Michael P. and Maya Polsky in
their respective taxable years ended in 1994, or instead is part
of the purchase price for shares of Indeck stock sold by Mr.
Polsky to Indeck; and
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Last modified: May 25, 2011