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Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
After settlement or concession of some issues, the two
primary issues for decision are (1) whether petitioner has
substantiated increased itemized deductions for State and local
income taxes, a $25,990 net operating loss (NOL) carryforward
from 1996, a $206,881 long-term capital loss carryforward from
1996, $35,289 in suspended passive activity losses in 1992
through 1996 relating to real estate which petitioner sold in
1997, and $40,466 in legal fees relating to an investment in a
limited partnership, and (2) whether a nonbusiness loan made by
petitioner to a friend became worthless in 1997.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
At the time the petition was filed, petitioner resided in
San Francisco, California.
Petitioner provides consulting services to developers and
contractors seeking building permits. Petitioner has invested in
various construction projects in the San Francisco Bay area.
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Last modified: May 25, 2011