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trial, respondent conceded the case involving Mr. Tripp. That
case was thereafter severed from the instant case, and a
stipulated decision was entered.
After concessions by respondent herein, the issues we must
decide are: (1) Whether petitioner had a basis in her interest in
the Tripp partnership sufficient to entitle her to deduct her
distributive share of the Tripp partnership losses in 2002, 2003,
and 2004; (2) whether the Tripp partnership may deduct $24,052 as
a salary expense in 2003; and (3) whether petitioner is liable for
accuracy-related penalties under section 6662 for 2002, 2003, and
2004.
Background
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.
During the years in issue, petitioner was employed full time
by a pharmaceutical company as a customer solutions manager. She
timely filed income tax returns for 2002, 2003, and 2004 in which
she reported wage income of $80,291, $80,562, and $126,671
respectively. During the same period, petitioner owned an 80-
percent interest in the Tripp partnership, a general partnership
which was formed under the laws of Ohio to provide personal care
hair services and nail services through a beauty salon. Mr. Tripp
owned the remaining 20-percent partnership interest.
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