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Petitioner reported on his Federal income tax return for
1990 the pro rata share of the losses sustained by Davidge and
Kuma. The amounts that petitioner reported were attributable to
the period January 1 through December 3, 1990, the date he filed
for bankruptcy. Petitioner carried forward losses from 1991
through 2000.8
Respondent determined that petitioner was not entitled to
the losses sustained by Davidge or Kuma from January 1 through
December 3, 1990, the date petitioner filed for bankruptcy.
Accordingly, respondent disallowed the losses and carryforwards
and issued two notices of deficiency covering the years 1996
through 2000.9 The deficiencies and accuracy-related penalties
for the years at issue are as follows:
Accuracy-Related Penalty
Year Deficiency Sec. 6662(a)
1996 $59,597 $11,919
1997 63,679 12,736
1998 30,524 6,105
1999 27,166 5,433
2000 12,681 2,536
8The parties stipulated that petitioner made the election
under sec. 172(b)(3) to forgo the carryback period and carry
forward the losses. The years 1990 through 1995 are not before
us.
9The notice of deficiency for 1996, 1997, and 1998 was
issued on Mar. 20, 2002, and the notice of deficiency for 1999
and 2000 was issued on Nov. 22, 2002.
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