Lillie M. Tripp - Page 4




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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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