Court Opinion

ID: 4617140
Source: CourtListenerOpinion
Date Created: 2020-11-21 02:35:58.583658+00
Date Added: 2024-06-11T07:55:15.424967
License: Public Domain

RJT INVESTMENTS X, LLC, RANDALL J. THOMPSON, TAX MATTERS PARTNER, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, RespondentRJT Invs. X, LLC v. Comm'rDocket No. 11769-05.United States Tax Court2006 U.S. Tax Ct. LEXIS 40; June 6, 2006, EnteredRJT Invs. X, LLC v. Comm'r, 2006 U.S. Tax Ct. LEXIS 39">2006 U.S. Tax Ct. LEXIS 39 (T.C., Apr. 18, 2006)*40 David Laro, Judge.David LaroDECISIONBy way of an Order dated April 18, 2006, the Court granted respondent's motion for summary judgment disposing of all issues in this case. By way of an Order dated April 19, 2006, the Court directed the parties to submit to the Court for filing a signed decision document or, if unable to agree on such a document, their respective computations for entry of decision. On May 18, 2006, the Court filed respondent's computation for entry of decision. On May 23, 2006, the Court filed petitioner's computation for entry of decision. On May 26, 2006, the Court filed petitioner's objection to respondent's computation for entry of decision. Upon due consideration of this matter, it isORDERED AND DECIDED that the following are determined as to petitioner's 2001 taxable year:Partnership ItemAs ReportedAs DeterminedCapital contribution$1,080,008-0-Portfolio income206-0-Net short-termcapital loss12,415-0-Deductions related toportfolio income81,040-0-Investment income includedin portfolio income206-0-Distribution of money986,759-0-Investment expensesincluded in deductionsrelated to portfolioincome81,040-0-It is further determined that RJT Investments X, LLC was a sham,*41  lacked economic substance, and was formed and/or availed to overstate artificially the basis of the interest of Randall Thompson in RJT Investments X, LLC in the amount of $22,006,759 for purposes of tax avoidance. Therefore, RJT Investments X, LLC is disregarded for Federal income tax purposes.It is further determined that the 40-percent gross valuation misstatement penalty under section 6662(a), (b)(3), (e), and (h), I.R.C., applies to any underpayment of tax attributable to any gross valuation misstatement resulting from adjustments of the above partnership items.It is further determined that the 20-percent penalty shall be imposed on any additional underpayment of tax attributable to negligence or disregard of rules and regulations as provided by section 6662(a), (b)(1), and (c), not attributable to any gross valuation misstatement./s/ David LaroDavid LaroJudgeENTERED: JUN 6 2006