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Unless otherwise indicated, section references are to the
Internal Revenue Code, as amended. Rule references are to the
Tax Court Rules of Practice and Procedure.
After concessions by respondent, the issues for decision in
these consolidated cases are: (1) Whether Mercury Solar PTO
should be disregarded as an entity separate from Sparkman for
Federal tax purposes and its net income attributed to Sparkman
for the years at issue; (2) whether in 1999 Mercury Solar PTO
(and hence Sparkman) had unreported income resulting from certain
rebate payments from Hawaii Electric Company (HECO); (3) whether
for the years at issue Sparkman is liable for self-employment tax
on his earnings from Mercury Solar PTO;2 (4) whether for the
years at issue Sparkman is entitled to claimed losses from a
purported business trust, Hawaii Environmental Holdings (HEH);
(5) whether Sparkman is entitled to additional itemized
deductions, allegedly not claimed on his Federal income tax
returns, for interest or charitable contributions; and (6)
2 The amount of Sparkman’s liability for self-employment
taxes and the amount of the related deduction under sec. 164(f)
to which Sparkman is entitled are computational matters.
Resolution of these issues depends upon our resolution of the
issue whether Mercury Solar PTO should be recognized as an entity
separate from Sparkman. Petitioners have not separately
challenged such liability, and we do not further discuss these
items.
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Last modified: May 25, 2011