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I.R.C., accuracy-related penalty on grounds of failure
to prove that they acted with reasonable cause and good
faith with respect to their substantial understatement
of income tax for 1994 and 1995.
Daniel C. Ertel, for petitioners.
Lydia A. Branche, for respondent.
MEMORANDUM OPINION
NIMS, Judge: Respondent determined the following
deficiencies and penalties with respect to petitioners’ Federal
income taxes for the taxable years 1994 and 1995:
Year Deficiency Penalties
Sec. 6662(a)
1994 $30,096 $6,019
1995 179,066 35,813
Unless otherwise indicated, all section references are to
sections of the Internal Revenue Code in effect for the years in
issue.
After concessions by petitioners the issues remaining for
decision are:
(1) Whether a section 1231 gain in the amount of $774,982
was realized and should be recognized, alternatively, in 1993 or
1994; and
(2) whether petitioners are liable for section 6662(a)
penalties in 1994 and 1995.
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