Gary R. Fears - Page 3
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Gateway to GFI and Gateway was dissolved. On December 22, 2000,
GFI sold the euro for $20,573.
On September 6, 2001, Gateway filed a Form 1065, U.S. Return
of Partnership Income, relating to the tax year beginning October
27, 2000, and ending December 21, 2000. The Form 1065 showed
distributions of property other than money in the amount of
$5,020,000 (i.e., the $5 million paid for the long options and
the purchase price of the euro). On June 28, 2001, GFI filed a
Form 1120S, U.S. Income Tax Return for an S Corporation, relating
to 2000. The Form 1120S showed a $4,999,427 loss relating to
foreign currency (i.e., a purported basis of $5,020,000 in the
foreign currency and a $20,573 amount realized).
On October 22, 2001, petitioner filed his 2000 Federal tax
return and reported a net operating loss of $4,146,903 relating
to GFI’s foreign currency loss. On August 12, 2002, petitioner
filed his 2001 Federal tax return and reported a net operating
loss of $4,146,903 and an overall loss of $2,948,966. On June
28, 2004, respondent sent Gateway, GFG, and GFI Notices of Final
Partnership Administrative Adjustment (FPAAs) relating to 2000.
On November 26, 2004, petitioner filed a petition relating to the
FPAA issued to Gateway. The Court, however, dismissed that
petition because it was not filed by a proper party.
On August 10, 2005, respondent sent petitioner a notice of
deficiency relating to 2001. Respondent disallowed petitioner’s
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Last modified: November 10, 2007