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MEMORANDUM FINDINGS OF FACT AND OPINION
WHERRY, Judge: Respondent determined a Federal income tax
deficiency for petitioners’ 1998 taxable year in the amount of
$47,175 and an addition to tax pursuant to section 6651(a)(1) in
the amount of $3,393.75.1 After concessions, the issues for
decision are:
(1) Whether petitioners are entitled to reduce their 1998
gross income by $448,120, representing the net loss claimed on
Schedule C, Profit or Loss From Business, for an enterprise
entitled “Shrike Cars”; and
(2) whether petitioners are liable for the section
6651(a)(1) addition to tax for failure to file their 1998 income
tax return timely.
Certain additional adjustments made by respondent to petitioners’
itemized deductions and exemptions are correlative in nature and
need not be separately addressed.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulations of the parties, with accompanying exhibits, are
incorporated herein by this reference. At the time the petition
1 Unless otherwise indicated, section references are to the
Internal Revenue Code in effect for the year in issue, and Rule
references are to the Tax Court Rules of Practice and Procedure.
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