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issues we must decide are: (1) Whether petitioner qualifies for
a theft loss deduction pursuant to section 165(c) in excess of
$5,586; (2) if petitioner is entitled to the deduction, whether
it is properly claimed for taxable year 2000; and (3) whether
petitioner is liable for the accuracy-related penalty pursuant to
section 6662(a).
FINDINGS OF FACT
Some of the facts and certain exhibits have been stipulated.
The parties’ stipulations of facts are incorporated herein by
reference and are found as facts. Petitioner resided in
Jacksonville, Florida at the time the petition was filed.
Petitioner is the sole shareholder in Big Ben Tree Service,
Inc. (BBTS), an S corporation. BBTS filed its Federal income tax
return for taxable year 2000 on June 25, 2001, on which it
claimed a theft of property held more than 1 year and valued at
$1,645,986.
BBTS issued to petitioner a Schedule K-1, Shareholder’s
Share of Income, Credits, Deductions, etc., attached to its
taxable year 2000 Federal income tax return, containing a loss
amount of $1,645,986 from previous years for inclusion on
petitioner’s return. BBTS also deducted a loss item of $155,227
for the current year from Form 4797, Sales of Business Property,
on its taxable year 2000 return. In attachments to their 2000
tax returns, both BBTS and petitioner alleged theft losses of:
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Last modified: May 25, 2011