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and adopts the opinion of the Special Trial Judge, which is set
forth below.
OPINION OF THE SPECIAL TRIAL JUDGE
ARMEN, Special Trial Judge: This matter is before the Court
on respondent’s Motion For Summary Judgment, filed pursuant to
Rule 121. As explained in detail below, we shall grant
respondent’s motion.
Background
In February 2001, petitioners filed a joint Form 1040, U.S.
Individual Income Tax Return, for the taxable year 2000 on which
they reported wages of $51,804, total tax of $5,121, and tax
withholding of $5,346. Petitioners’ tax return included two
Forms 2439, Notice to Shareholder of Undistributed Long-Term
Capital Gains. The Forms 2439 stated that petitioners were
shareholders of a regulated investment company (RIC) or real
estate investment trust (REIT).2 The Forms 2439 identified the
investment entity as “Black Investment, Tax Dept. of Treasury”
and listed the amount of tax paid by the entity on petitioners’
2 Sec. 852(b)(1) and (3)(A) provides that tax will be
imposed on the taxable income and capital gains of a regulated
investment company (RIC). Sec. 852(b)(3)(D)(i) provides that a
RIC’s shareholder “shall include, in computing his long-term
capital gains in his return * * * such amount as the * * * [RIC]
shall designate”. Sec. 852(b)(3)(D)(ii) provides that such
shareholder “shall be deemed to have paid * * * the tax imposed”
under sec. 852(b)(3)(A), and the shareholder shall be allowed a
“credit or refund, as the case may be, for the tax so deemed to
have been paid by him.”
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Last modified: May 25, 2011