- 3 -
petitioners resided in Fairfax, Virginia.
Table 1 shows selected items from petitioners’ timely filed
income tax returns (Forms 1040) for 2001 and 2003.
Table 1
Item--Line on 2001 (2003) Form 1040 2001 2003
7. (7) Wages $253,598.43 $267,398.35
8a. (8a) Taxable interest 226.05 154.35
9. (9a) Ordinary dividends 217.85 189.11
13. (13a) Capital gain or
(loss) (9,256.63) (60,641.96)
33. (34) Adjusted gross income 244,785.70 207,099.85
39. (40) Taxable income 221,055.33 179,709.47
58. (60) Total tax 61,222.00 40,749.63
59. (61) Withholding 57,196.78 55,293.37
70. Amount owed 4,025.22
(70a) Overpayment to be
refunded 14,543.74
In 2001, petitioners realized and recognized a long-term
capital loss in the amount of $9,256.63, as they claimed on their
2001 tax return.3 In 2003, petitioners realized and recognized a
net long-term capital loss of $60,641.96, as they claimed on
their 2003 tax return.
In the notice of deficiency for each year, respondent
disallowed the claimed capital loss deduction for that year to
the extent the loss exceeded $3,000, and also made consequential
adjustments to itemized deductions and (for 2003) personal
exemption deductions. Also, the 2003 adjustments resulted in a
3 The parties’ stipulation that the loss was 1 cent less
than our finding is evidently a typographical error, as shown by
their stipulations as to petitioners’ proceeds and adjusted
basis.
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