Falsetti v. Commissioner
United States Tax Court
Ps were limited partners in M, a California limited partnership. M purportedly purchased an apartment complex (the property) from W, a Cayman Islands corporation, which purportedly purchased the property from H. M purportedly made interest payments to W. Ps were subsequently "cashed out" by H for the amount of their capital contributions plus 10 percent per annum simple interest.
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Ps were limited partners in M, a California limited partnership. M purportedly purchased an apartment complex (the property) from W, a Cayman Islands corporation, which purportedly purchased the property from H. M purportedly made interest payments to W. Ps were subsequently "cashed out" by H for the amount of their capital contributions plus 10 percent per annum simple interest. Held, the totality of the facts and circumstances surrounding the alleged sale transactions demonstrates that the purported sales were shams in substance, as defined for purposes of this case, and therefore M was not…
1Opinion of the Court
Nims, Judge:
Respondent determined the following deficiencies and additions to tax in petitioners’ income taxes for the taxable years ending December 31:
Case Docket No. Year Deficiency Additions to tax sec. 6651(a)2
Falsetti 7013-82 1976 $3,590
1977 5,383
1978 12,546
Cuttone 5437-83 1976 co t>0 m
1977 o H-1 co
Bittner 5438-83 1976 co CO at
1977 4^ to o
Medefind 7111-83 1974 3,404
1976 5,337
1977 9,885
14,250 Monterey Pines 20833-83 CO C-05 t-4 CO CO CO €©■
123,279 Investors t> t> 05 t — I o <N OO O CO
After concessions, the issues for decision are: (1) Whether Monterey Pines Investors was engaged in a bona…
2Cases cited18 opinions
- Cohan v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1930
- Knetsch v. United StatesSupreme Court of the United States · 1960
- Frank Lyon Co. v. United StatesSupreme Court of the United States · 1978
- Commissioner v. BrownSupreme Court of the United States · 1965
- Estate of Charles T. Franklin, Deceased v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1976
13 more not listed; retrieve them via the Exa API.
3Cited by145 opinions
- Dahlstrom v. CommissionerUnited States Tax Court · 1985
- Rose v. CommissionerUnited States Tax Court · 1987
- Patin v. CommissionerUnited States Tax Court · 1987
- Glass v. CommissionerUnited States Tax Court · 1986
- Ewing v. CommissionerUnited States Tax Court · 1988
140 more not listed; retrieve them via the Exa API.