Kempker v. Commissioner

1985 T.C. Memo. 110, 49 T.C.M. 942, 1985 Tax Ct. Memo LEXIS 521

Opinion

HERBERT and PATRICIA KEMPKER, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent

Kempker v. Commissioner

Docket No. 26030-81.

United States Tax Court

T.C. Memo 1985-110; 1985 Tax Ct. Memo LEXIS 521; 49 T.C.M. (CCH) 942; T.C.M. (RIA) 85110;

March 13, 1985.

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Michael C. Cohen, for the respondent.

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FAY

MEMORANDUM OPINION

FAY, Judge: This case is before the Court on respondent's motion for entry of decision filed on January 8, 1985. A hearing on respondent's motion was held on January 8, 1985, at the trial session in Los Angeles, California.

Respondent determined a deficiency of $37,210 in petitioners' Federal income tax for 1976. The only issue is whether petitioners are entitled to a deduction for their share of losses from a certain partnership in 1976. The loss claimed by the partnership was based entirely on a advance royalty expense with respect to an alleged coal mining sublease.

Petitioners, Herbert Kempker and Patricia Kempker, resided in Arcadia, Calif., when they filed their petition herein.

Petitioners were limited partners in a coal mining partnership known as The Benham Group. In Gauntt v. Commissioner,82 T.C. 96 (1984), on appeal (9th Cir., Dec. 10, 1984) this Court, in considering the case of another Benham Group partner, held that The Benham Group's advance royalty obligation under the sublease was illusory, and, therefore, concluded that no portion of the advance royalties could be deducted by the partnership in 1976.

Petitioners have not presented to the Court any additional facts nor legal arguments other than those considered in Gauntt.¹ Thus, based on our holding in Gauntt, we conclude that petitioners are not entitled to a loss deduction from The Benham Group partnership in 1976.

To reflect the foregoing,

An appropriate order and decision will be entered.

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Footnotes

• 1. We note that neither petitioners nor their counsel appeared at the hearing of this motion. However, petitioners had previously notified respondent that they had no objection to the granting of respondent's motion for entry of decision.