John Karason - Page 2




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               The issues for decision are:  (1) Whether petitioner is                
          entitled to section 179 expense and section 167 depreciation                
          deductions; (2) whether petitioner has sufficient basis in a                
          partnership entitling him to deduct partnership losses; and (3)             
          whether petitioner is liable for an accuracy-related penalty                
          pursuant to section 6662(a).                                                
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated and are so found.               
          The stipulation of facts and the attached exhibits are                      
          incorporated herein by this reference.  Contrary to the petition,           
          which indicated petitioner resided in Elizabethtown,                        
          Pennsylvania, when the petition was filed petitioner resided in             
          Lincoln, California.                                                        
          A.   Petitioner’s Background                                                
               Petitioner graduated from college with a degree in political           
          science and accounting and subsequently pursued a master’s degree           
          in taxation and business administration.  He did not complete the           
          graduate degrees.  While working on his master’s in taxation,               
          petitioner was employed as a tax manager for Levin Rosenfeld in             
          Bedminster, New Jersey.  A year later, he left Levin Rosenfeld              
          and moved to Ohio to work for Provident Nursing Homes as its                
          assistant controller.  In January 1988, he began employment with            


               1(...continued)                                                        
          rounded to the nearest dollar.                                              





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