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Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue.
The primary issue for decision is whether, during the years
in issue, petitioner Csaba L. Magassy and an S corporation, in
which Csaba L. Magassy was the sole shareholder and director,
were involved in the restoration, charter, and sale of a Feadship
yacht with a profit objective.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
Petitioners are husband and wife and resided in Potomac,
Maryland, at the time the petition was filed.1 Petitioners have
three children -- two sons and a daughter.
Petitioner has a successful medical practice in the
Washington, D.C. metropolitan area with a specialty in plastic
surgery.
On March 1, 1990, Bill Norman (Norman), petitioner’s
brother-in-law, suggested that petitioner purchase a particular
108’ Feadship yacht, which was then located in Florida and which
was being offered for sale through Lee Mogul (Mogul), the father
of Mark Mogul, one of Norman’s employees. Mogul owned a yacht
brokerage business, Boats, Yachts & Ships, Inc., which was
located in Ft. Lauderdale, Florida.
1 Hereinafter, references to petitioner in the singular are to
Csaba L. Magassy.
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