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In February 1989, petitioner pleaded guilty to trafficking
in marijuana and other related offenses. He received a prison
term of 7 to 25 years and was ordered to forfeit 141 of his
rental properties. See Thrower v. Anderson, No. 98AP-1152 (Ohio
Ct. App. May 18, 1999); State v. Thrower, No. 14967 (Ohio Ct.
App. July 31, 1991); State v. Thrower, 575 N.E.2d 863, 876-877,
879 (Ohio Ct. App. 1989).
For 1988, petitioner filed no Federal income tax return and
paid no estimated taxes.
OPINION
1. Unreported Rental Income
In the notice of deficiency, respondent determined that in
1988 petitioner had $217,460 of unreported net rental income,
representing $543,851 of gross rental income reduced by $98,501
of depreciation expense and $227,890 of other rental expenses.
In his petition, petitioner affirmatively acceded to these
determinations.3 At trial, petitioner offered into evidence a
photocopy of a 1988 Form 1040, U.S. Individual Income Tax Return
(the purported return), which he contended was “my 1988 tax
3 The petition states: “I do not contest the rental income
and expenses.” Moreover, petitioner failed to respond to
respondent’s requests for admissions, which set forth the same
amounts of gross receipts, expenses, and depreciation
attributable to his rental properties as contained in the notice
of deficiency. Pursuant to Rule 90(c), petitioner is deemed to
have admitted these matters. See Freedson v. Commissioner, 65
T.C. 333, 335-336 (1975), affd. 565 F.2d 954 (5th Cir. 1978).
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