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Respondent determined a deficiency of $25,746, and a section
6662(a) accuracy-related penalty of $2,412, with respect to
petitioners’ 2000 Federal income tax.
The issues for decision are: (1) Whether petitioners are
liable for the 10-percent additional tax imposed by section 72(t)
with respect to a distribution from a qualified retirement plan,
(2) whether petitioners are entitled to a casualty loss deduction
not claimed on their 2000 joint Federal income tax return, and
(3) whether petitioners are liable for an accuracy-related
penalty under section 6662(a).
Background
Some of the facts have been stipulated and are so found.
Petitioners are, and were at all times relevant, married to each
other. At the time the petition was filed, they resided in
Midlothian, Illinois. References to petitioner are to Francis N.
Leonard.
In 1978, petitioners purchased a house which had been built
about 1905. Petitioners had a deck built on the back of the
house in 1995 at a cost of approximately $7,000. The deck was
attached, in part, to the siding on the backside of petitioners’
house. The deck was insured by petitioners’ homeowner’s policy
with Illinois Farmers Insurance Company (Farmers Insurance) at a
value of $9,000.
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