Albert M. Graham and Martha A. Graham - Page 3

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          the partnership owned fractional shares was $37,204, as                     
          petitioners contend, or $64,812.33, as respondent contends.  We             
          hold that it had a fair market value of $59,629.38.                         
               2.  Whether petitioners had unreported income of $12,764 for           
          1998 and $2,735 for 1999.  We hold that they had unreported                 
          income of $6,264 for 1998 and $2,735 for 1999.                              
               3.  Whether we will grant respondent’s motion to amend the             
          answer, and, if so, whether petitioners are liable for increased            
          deficiencies and additions to tax because of their failure to               
          report (a) business income of $67,437 for 1995 and $87,942.76 for           
          1998 and (b) distributions from the Anis Recovery Fund                      
          partnership consisting of an ordinary loss of $2,240 for 1995, a            
          capital gain of $5,594 for 1998, and income of $9,127 for 1999.             
          We will grant respondent’s motion, and we conclude that                     
          petitioners had unreported income of $67,437 for 1995 and                   
          $87,942.76 for 1998, an ordinary loss of $2,240 for 1995, a                 
          capital gain of $5,594 for 1998, and income of $9,127 for 1999.             
               4.   Whether petitioner is liable for the fraud penalty                
          under section 66633 for 1995, 1998, and 1999.  We hold that he is           
          to the extent discussed below.                                              
               5.  Whether petitioners are liable for the accuracy-related            
          penalty for negligence on a portion of the underpayment of their            

               3  Section references are to the Internal Revenue Code, and            
          Rule references are to the Tax Court Rules of Practice and                  
          Procedure.                                                                  




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