Robert E. Corrigan - Page 42

                                       - 42 -                                         
               Next, we consider the brokerage commission rebates that                
          petitioner failed to include in gross income for 1987 and 1988.             
          The question we consider with respect to those adjustments is               
          whether there was adequate disclosure of such reductions from               
          gross income.  Petitioner disclosed on his returns that he was              
          reducing his income by the amount of the rebates reflected on the           
          Forms 1099 he issued and thus adequately disclosed his position.            
          Accordingly, petitioner is not subject to the substantial                   
          understatement additions to tax for 1987 and 1988 with respect to           
          the understatement attributable to the rebate determination.                
               The adjustment concerning petitioner’s claim that he is                
          entitled to deduct all of the losses from the horse breeding                
          activity at JAC Ranch for 1987 through 1991 is one that likewise            
          was dependent as a threshold matter upon petitioner’s being able            
          to file a joint return with Mrs. Corrigan.  As already explained,           
          there was no disclosure on the returns that petitioner and Mrs.             
          Corrigan were divorced and, therefore, not entitled to file a               
          joint return.  Likewise, it was not reasonable to claim joint               
          filing status at a time when petitioner knew he was divorced.               
          Accordingly, petitioner may be subject to the substantial                   
          understatement additions to tax for 1987 and 1988 as to the                 
          losses claimed from the JAC Ranch.                                          









Page:  Previous  25  26  27  28  29  30  31  32  33  34  35  36  37  38  39  40  41  42  43  44  Next

Last modified: May 25, 2011