Ramsay v. Commissioner
United States Tax Court
During the years in question, all of the petitioners deducted losses in connection with various mining investment projects offered by Resources America, Inc. These losses were attributable to deductions for purported "advanced minimum royalties," which petitioners "paid" in the form of cash and nonrecourse notes. Held: The mining investment projects did not constitute an activity engaged in for profit, but rather represented a blatant, abusive tax shelter.
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During the years in question, all of the petitioners deducted losses in connection with various mining investment projects offered by Resources America, Inc. These losses were attributable to deductions for purported "advanced minimum royalties," which petitioners "paid" in the form of cash and nonrecourse notes. Held: The mining investment projects did not constitute an activity engaged in for profit, but rather represented a blatant, abusive tax shelter. Therefore, the purported "advanced minimum royalties" are not deductible under sec. 162(a), I.R.C. 1954.
1Opinion of the Court
Sterrett, Judge.
Respondent issued statutory notices of deficiency in these consolidated cases which determined deficiencies in petitioners’ Federal income taxes as follows:
Docket No. Petitioner Year Deficiency
8818-81 Ernest C. Ramsay and Barbara G. Ramsay 1977 1978 $7,663.00 8,924.00
20883-81 R. Craig Peyton 1978 8,091.50
21664-81 Mary E. Webster 1977 1978 1979 4,123.00 8,275.00 6,610.00
23213-81 Richard R. Hayes 1978 20,662.00
25549-81 Wallace F. Williams and Marlene Williams 1978 1979 19,392.00 808.00
27339-81 28096-81 Richard R. Hayes and Joellen D. Hayes John E. Muroski and Jeanne Muroski 1977…
2Cases cited18 opinions
- Golanty v. CommissionerUnited States Tax Court · 1979
- E.A. Brannen and Frances K. Brannen v. Commissioner of Internal RevenueCourt of Appeals for the Eleventh Circuit · 1984
- Brannen v. CommissionerUnited States Tax Court · 1982
- Allen v. CommissionerUnited States Tax Court · 1979
- Siegel v. CommissionerUnited States Tax Court · 1982
13 more not listed; retrieve them via the Exa API.
3Cited by20 opinions
- Rose v. CommissionerUnited States Tax Court · 1987
- Waddell v. CommissionerUnited States Tax Court · 1986
- Thomas v. CommissionerUnited States Tax Court · 1985
- Capek v. CommissionerUnited States Tax Court · 1986
- Seaman v. CommissionerUnited States Tax Court · 1985
15 more not listed; retrieve them via the Exa API.