T.C. Memo. 2006-191
UNITED STATES TAX COURT
THOMAS AND JANICE GLEASON, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 18377-04. Filed September 11, 2006.
During 1995, Ps, through P-H, became involved in a
leveraged buyout transaction resulting in ownership of
two S corporations, A and T, and relinquishment of an
interest in another S corporation, E. By early 1996, A
and T were insolvent and thereafter entered bankruptcy
proceedings.
Held: Ps’ income and losses for 1994 and 1995
related to ownership of A, T, and E are to be adjusted
consistent with this opinion.
Held, further, Ps are liable for accuracy-related
penalties pursuant to sec. 6662, I.R.C., for 1994 and
1995 to the extent that underpayments remain following
recomputation in accordance with the Court’s resolution
of substantive issues.
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