Eagle Trading Opportunities, LLC v. Comm'r

DECISION

Pursuant to Tax Court Rule 248(b), it is

ORDERED AND DECIDED: That the following statement shows the adjustments to the partnership items of Eagle Trading Opportunities, LLC, for the taxable year 2000:

It is determined that the foreign currency options, purportedly contributed to or assumed by Eagle Trading Opportunities, LLC, are treated as never having been contributed to or assumed by said partnership and any gains or losses purportedly realized by said partnership on the options are treated as having been realized by its partners.

It is determined that a 40 percent gross valuation misstatement penalty under I.R.C. §§ 6662(a), (b)(3), (e) and (h) applies to any underpayment of tax attributable to overstating the capital contributions claimed to have been made to the purported partnership.

It is determined that a 20 percent penalty applies to any additional underpayment of tax not attributable to any gross valuation misstatement, as such *47 underpayment is attributable to negligence or disregard of rules or reuglations under I.R.C. §§ 6662(a), (b)(1) and (c) or a substantial understatement of income tax under I.R.C. §§ 6662(a), (b)(2) and (d).

(Signed) John O. Colvin

Chief Judge

Entered: JAN 23 2009