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Year Deficiency Sec. 6662(a)1 Penalty
1999 $323,517.00 $64,703.40
2000 207,511.00 41,502.20
After concessions,2 the issues for decision are: (1) Whether
petitioner received rental income of $16,200 in 1999 and $16,200
in 20003 (years in issue); (2) whether amounts disbursed to or on
behalf of petitioner by Caspian Consulting Group, Inc. (Caspian)
during the years in issue were properly characterized as loans or
should be recharacterized as constructive dividends; and (3)
whether petitioner is liable for accuracy-related penalties under
section 6662(a) for the years in issue.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits, to the extent
admitted, are incorporated herein by this reference. At the time
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code, as amended, and all Rule references
are to the Tax Court Rules of Practice and Procedure.
2 Petitioner concedes that he received the following: (1)
Capital gain of $137,880 in 1999; (2) additional income of
$4,415.57 in 1999 from personal expenses charged by petitioner to
Caspian’s credit card and paid by Caspian; and (3) additional
inoome of $10,000 in 2000 from petitioner’s personal use of the
company aircraft.
3 In respondent’s notice of deficiency, respondent
determined that petitioner had received rental income of $19,800
for 1999 and $19,800 for 2000. However, respondent subsequently
conceded that this amount was the result of a computational error
and asserted that petitioner received only $16,200 in each year.
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Last modified: May 25, 2011