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(2) Whether petitioner is entitled to report carryforward
losses to which he succeeded upon termination of the Estate after
his debts were discharged in bankruptcy. We hold that he is not.
(3) Whether petitioner is liable for each year at issue for
the accuracy-related penalty under section 6662(a)2 for
substantial understatement of income tax. We hold that he is
not.
FINDINGS OF FACT
These cases were submitted to the Court fully stipulated
under Rule 122. The stipulation of facts and the accompanying
exhibits are incorporated by this reference, and the facts are so
found.3 Petitioner resided in New York, New York, when he filed
the petitions with this Court.4
Petitioner was a self-employed investment adviser for each
year at issue. Petitioner owned all of the shares of two S
corporations, Davidge & Co. (Davidge) and Kuma Securities (Kuma),
until December 3, 1990, the date he filed for bankruptcy. The
2All section and subchapter references are to the Internal
Revenue Code in effect for the years at issue, unless otherwise
indicated, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
3Sec. 7491 is effective with respect to court proceedings
arising in connection with examinations by the Commissioner
commencing after July 22, 1998, the date the Internal Revenue
Service Restructuring and Reform Act of 1998, Pub. L. 105-206,
sec. 3001, 112 Stat. 726, was enacted. Although the examinations
for these cases began on Aug. 5, 1999, for 1996 through 1998 and
on Apr. 4, 2002, for 1999 through 2000, these cases were
submitted fully stipulated. Therefore, no facts are in dispute,
and we decide these cases without regard to the burden-shifting
rule of sec. 7491(a)(1).
4These two cases were consolidated for trial, briefing, and
opinion in an order from this Court dated May 15, 2003.
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