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whether petitioner is entitled to certain deductions and is
liable for the section 6662(a) accuracy-related penalty relating
to 1998.
Background
During 1998, petitioner and his brother, Patrick Grabowski,
operated several businesses including a property management
company, a trailer park, and two motels (collectively, the
businesses). Petitioner was responsible for the onsite
management of the businesses while Patrick paid the expenses and
maintained the books and records.
Petitioner, on his 1998 Federal income tax return, reported
losses relating to the businesses. On April 25, 2005, respondent
issued petitioner a notice of deficiency relating to 1998.
Respondent determined that petitioner did not substantiate the
losses relating to the businesses and was liable for the section
6662(a) accuracy-related penalty.
On July 25, 2005, petitioner, while residing in Lake Ozark,
Missouri, filed his petition with the Court.
Discussion
Petitioner contends that the losses relating to the motels
and trailer park are deductible pursuant to section 162. Section
162(a) allows as a deduction all the ordinary and necessary
expenses paid or incurred during the taxable year in carrying on
a trade or business. Petitioner must maintain sufficient records
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Last modified: November 10, 2007