Winston Knauss - Page 2

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          determined income tax deficiencies and fraud penalties under                
          section 6663(a) with respect to petitioner’s 1991, 1994, 1995,              
          and 1996 taxable years.  Petitioner timely petitioned for                   
          redetermination with respect to both notices, and the cases                 
          covering each were consolidated for trial, briefing, and opinion.           
          The deficiencies and fraud penalties determined were as follows:            
                                                  Penalty                             
          Year       Deficiency       Sec. 6663(a)                                    
          1991          $4,323            $3,242                                      
          1994          88,012            66,009                                      
          1995         182,387           136,790                                      
          1996         173,624           130,218                                      
          1997         185,155           139,616                                      

               After concessions,2 the issues for decision in these cases             
          (“this case”) are:  (1) Whether petitioner understated gain on              
          the sale of yachts in 1994, 1996, and 1997 by $155,848, $527,074,           
          and $615,119, respectively; (2) whether petitioner understated              
          gain from the sale of real property in 1995 by $232,400; (3)                
          whether petitioner had unreported income from his yacht charter             
          business in 1994, 1995, and 1996 of $68,350, $190,615, and                  
          $34,544, respectively; (4) whether petitioner failed to report              
          income of $92,420, $36,000, and $13,000 in 1994, 1996, and 1997,            
          respectively, from the settlement of lawsuits; (5) whether                  


               2 Petitioner has conceded that he received $85,119 of income           
          in 1995 as a finder’s fee that was not reported on his 1995                 
          return.  Respondent has conceded that his determination of the              
          amount of unreported gain on the sale of a yacht in 1994 was                
          overstated by $1,000.                                                       




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