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return * * * signed under oath.” The purported return is dated
September 8, 2002–-2 days before trial. On line 18 (“Rents,
royalties, partnerships, estates, trusts, etc.”) of the purported
return, petitioner listed $445,354 of net rental income--a
significantly greater amount than respondent had determined in
the notice of deficiency--representing $1,212,140 of rents
received, reduced by $98,499 of depreciation expense and $668,287
of other rental expenses. On line 15 (“Other gains or (losses)”)
of the purported return, petitioner listed $2,283,273 of alleged
losses which he contends resulted from “involuntary conversion”
of his forfeited rental properties.
After trial, with leave of the Court, respondent filed an
amendment to his answer, asserting an increased deficiency and
additions to tax in conformity with the evidence that
petitioner’s 1988 net rental income is $445,352.4
Petitioner has not sought to retract or disavow his
admissions on the purported return as to the amounts of his gross
rental income, rental depreciation expense, and other rental
expenses. He argues, however, that his net rental income is more
than offset by the $2,283,273 of losses that he claimed on the
purported return.
4 Respondent attributes to rounding the $2 difference
between the amounts of net rental income indicated on the
purported return and as calculated in the amended answer.
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