Kenneth and Dorothy Hitchen - Page 29

                                       - 29 -                                         
               In general, section 465(a) allows losses “only to the extent           
          of the aggregate amount with respect to which the taxpayer is at            
          risk * * * for such activity”.  Sec. 465(a)(1).  Section 46(c)(8)           
          generally reduces a taxpayer’s credit base in property by the               
          amount of nonqualified nonrecourse financing with respect to such           
          property--where the taxpayer and the property are subject to the            
          limitations of section 465--thereby limiting the amount of                  
          general business credit available to the taxpayer.  Sec 38(a),              
          (b)(1); sec. 46(a), (c)(1), (c)(8)(A) and (B).                              
               Petitioners have not presented any evidence or arguments               
          concerning the imposition of tax motivated interest on the                  
          deficiencies.  Specifically, petitioners have not argued, and               
          nothing in the record indicates, that respondent is in error                
          concerning his determinations that petitioners did not meet the             
          “at risk” requirements of section 465 with respect to the farming           
          losses, and that the general business credit was disallowed                 
          pursuant to section 46(c)(8).  We therefore sustain respondent’s            
          determination that the section 6621(c) increased rate of interest           
          is applicable with respect to the deficiencies in petitioners’              
          taxable years 1984, 1985, 1987, and 1988.9  See Rule 142(a).                

          9Sec. 6621(c) does not apply with respect to petitioners’                   
          taxable year 1989.  See supra note 3.                                       

Page:  Previous  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  33  Next

Last modified: May 25, 2011