Ferrell v. Commissioner
United States Tax Court
Petitioners purchased limited partnership interests in Western Reserve Oil & Gas Co. (Western Reserve) and claimed deductions for their distributive shares of losses and other deductions reported by Western Reserve for 1981 and 1982. Held, Western Reserve did not incur the disputed losses and expenditures in carrying on a "trade or business" within the meaning of sec. 162(a) or sec. 167(a), I.R.C. 1954; therefore, the claimed deductions are not allowable.
Read the full summary
Petitioners purchased limited partnership interests in Western Reserve Oil & Gas Co. (Western Reserve) and claimed deductions for their distributive shares of losses and other deductions reported by Western Reserve for 1981 and 1982. Held, Western Reserve did not incur the disputed losses and expenditures in carrying on a "trade or business" within the meaning of sec. 162(a) or sec. 167(a), I.R.C. 1954; therefore, the claimed deductions are not allowable. Held, further, the purported obligations on which the interest deductions were allegedly accrued were not genuine indebtedness within the…
1Opinion of the Court
FEATHERSTON, Judge:
These consolidated actions are test cases which were selected for trial to attempt to resolve approximately 200 other cases (many with multiple petitioners) docketed in this Court, as well as other similar cases pending administratively in the Internal Revenue Service (IRS). In the cases before the Court, respondent determined the following deficiencies for 1981 and 1982:
William L. Ferrell Docket No. 8679-86
Addition Sec. 6653(a)(1), Sec. 6653(a)(2), Sec. 6659,
Year Deficiency I.R.C. 1954 I.R.C.1954 I.R.C.1954
1982 $21,797 $1,090 50% of interest due on $21,797 $6,540
Robert…
2Cases cited56 opinions
- Neely v. CommissionerUnited States Tax Court · 1985
- Frank Lyon Co. v. United StatesSupreme Court of the United States · 1978
- Dreicer v. CommissionerUnited States Tax Court · 1982
- 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
51 more not listed; retrieve them via the Exa API.
3Cited by44 opinions
- McCrary v. CommissionerUnited States Tax Court · 1989
- Hulter v. CommissionerUnited States Tax Court · 1988
- Krause v. CommissionerUnited States Tax Court · 1992
- Smith v. CommissionerUnited States Tax Court · 1988
- Dean B. Smith and Irma Smith v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1991
39 more not listed; retrieve them via the Exa API.