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OPINION
FOLEY, Judge: This matter is before the Court on
respondent’s motion to dismiss for lack of jurisdiction and to
strike. The issue for decision is whether the Court has
jurisdiction to determine whether petitioner is liable for
section 6662(a) and (h)1 penalties relating to 2001.
Background
On October 27, 2000, Gateway Investment Partners (Gateway)
was formed. GF Gateway Investments LLC (GFG) and GF Investors
Inc. (GFI), an S corporation, owned 99 percent and 1 percent of
Gateway, respectively. Petitioner was the sole member of GFG and
the sole shareholder of GFI.
On November 21, 2000, GFG sold two foreign currency options
(the short options) to Deutsche Bank for $4,950,000 and purchased
two foreign currency options (the long options) from Deutsche
Bank for $5 million (collectively, the option positions). On
November 22, 2000, GFG contributed the option positions to
Gateway in return for its interest in Gateway. On December 7,
2000, Gateway paid $20,000 for 22,264.28. On December 13, 2000,
the option positions terminated and were not exercised. On
December 21, 2000, GFG transferred to GFI its 99-percent interest
in Gateway. On that same day, the euro were transferred from
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue.
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Last modified: November 10, 2007