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6651(a)(1).2 The deficiency and addition to tax were reflected
in a notice of deficiency issued to petitioner on November 30,
2001, and result from respondent’s disallowance of petitioner’s
deduction of a $234,265 net operating loss (NOL) carryover from
its 1996 taxable year. Petitioner concedes that it is not
entitled to the NOL deduction and alleges in an amendment to
petition filed with the Court on June 13, 2003, that it
“abandoned certain depreciable assets in the tax year 1997, and
is entitled to a deductible loss for the amount of the basis in
said assets for that year.” The amendment does not list the
amount of the claimed loss but references an amended return
prepared by petitioner on August 28, 2002, claiming an
abandonment loss of $246,382. Petitioner asserts in its opening
brief that its abandonment loss is actually $169,439.
We decide first whether petitioner may deduct an abandonment
loss for the subject year. We hold it may not. We decide second
whether petitioner is liable for the addition to tax determined
by respondent under section 6651(a)(1). We hold it is.
FINDINGS OF FACT
Some facts were stipulated. The stipulated facts and the
accompanying exhibits are incorporated herein by this reference.
2 Unless otherwise indicated, section references are to the
applicable versions of the Internal Revenue Code, Rule references
are to the Tax Court Rules of Practice and Procedure, and dollar
amounts are rounded to the nearest dollar.
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Last modified: May 25, 2011