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Addition to Tax
Deficiency Under Sec. 6651(a)(1)*
$218,289 $30,739
* Respondent’s notice of deficiency also
determined additions to tax under secs.
6651(a)(2) and 6654, which additions
respondent conceded at trial.
The issues for decision are: (1) Whether petitioner for
2001 is entitled to a $192,046 long-term capital loss
carryforward from 2000; (2) whether petitioner is liable for an
addition to tax under section 6651(a)(1) for failure to timely
file his 2001 Federal income tax return.
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. At
the time the petition was filed, petitioner was a resident of
Danville, California.
In 1997, petitioner, with Frank Garza, Jr. (Garza), an
accountant and aggressive investment adviser, began putting
together a proposal to develop in Trieste, Italy, “a fully
functioning digital city” (Trieste project). Under the Trieste
project, there was to be developed and installed in Trieste,
Italy (where Garza’s brother-in-law played professional
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