- 2 - Respondent determined that petitioners are liable for a deficiency in Federal income tax of $5,185 and an accuracy- related penalty under section 6662 of $1,037 for the 2001 taxable year. After concessions,1 the issue for decision is whether petitioners’ gross income for 2001 includes $30,714, the portion of a loan discharged by the United States Department of Agriculture during that taxable year. Background Some of the facts have been stipulated, and they are so found. An oral stipulation of facts and the exhibits are incorporated herein by this reference. At the time of filing of their petition, petitioners resided in Provo, Utah. In 1991, petitioners received a $50,000 loan from the United States Department of Agriculture (USDA). At the time, petitioners were farmers in Hawaii who leased 20 acres of land for a farming operation. The loan, which was secured by the farm,2 was to be used to make lease payments. It is unclear from the record whether the lease payments were ever made. 1 Respondent concedes that petitioners are not liable for the accuracy-related penalty under sec. 6662 of $1,037 for the 2001 taxable year. Petitioners concede that they are not entitled to an IRA deduction of $300 for the 2001 taxable year. 2 Petitioners assert that they owned the farm that was used to secure the loan by the USDA. The circumstances surrounding the ownership of this farm are unclear.Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011