Drobny v. Commissioner
United States Tax Court
Ps were investors in two research and development programs, a partnership and a joint venture. The programs promised the investors a deduction of $ 5 for every $ 1 of cash invested. For each unit of participation, Ps invested $ 11,000 in cash and $ 45,000 from the proceeds of bank loans payable in 3 weeks, which were arranged through the programs.
Read the full summary
Ps were investors in two research and development programs, a partnership and a joint venture. The programs promised the investors a deduction of $ 5 for every $ 1 of cash invested. For each unit of participation, Ps invested $ 11,000 in cash and $ 45,000 from the proceeds of bank loans payable in 3 weeks, which were arranged through the programs. At the closing, the proceeds of the loans were transferred to a contractor and to subcontractors ostensibly to fund research; but in fact, they were invested in short-term commercial paper, and when the paper matured, the proceeds were used to pay…
1Opinion of the Court
SIMPSON, Judge:
The Commissioner determined the following deficiencies in, and addition to, the petitioners’ Federal income taxes for 1979:
Addition to tax
Petitioners Deficiency sec. 6653(b) I.R.C. 19541
Sheldon and Anita $10,877 $5,439
Drobny Louis and Ruth Lifshitz 32,052 - - -
The issues for decision are: (1) Whether the petitioners are entitled to deductions for their proportionate share of losses resulting from alleged research and experimental expenditures by a joint venture and a partnership in 1979; and (2) whether Mr. Drobny is liable for the addition to tax for fraud under section…
2Cases cited60 opinions
- Stone v. CommissionerUnited States Tax Court · 1971
- Gajewski v. CommissionerUnited States Tax Court · 1976
- Beaver v. CommissionerUnited States Tax Court · 1970
- Dreicer v. CommissionerUnited States Tax Court · 1982
- Otsuki v. CommissionerUnited States Tax Court · 1969
55 more not listed; retrieve them via the Exa API.
3Cited by79 opinions
- Smith v. CommissionerUnited States Tax Court · 1988
- Hoffman v. Comm'rUnited States Tax Court · 2002
- Sheldon Drobny and Anita Drobny v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1997
- Larry Bergman Patricia Bergman v. United StatesCourt of Appeals for the Eighth Circuit · 1999
- Copeland v. CommissionerCourt of Appeals for the Fifth Circuit · 2002
74 more not listed; retrieve them via the Exa API.