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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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