Roger E. Goodrich and Suzanne B. Goodrich - Page 4

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          $42,000 to pay salaries of its employees, rent, and other                   
          business expenses of UI.                                                    
               The following schedule reflects the dates and amounts of               
          petitioners’ 1986 and 1987 transfers of funds to UI:                        

                      Date                Funds Transferred                           
                      10/14/86            $155,475                                    
                      03/03/87            18,000                                      
                      04/01/87                24,000                                  
                           Total          $197,475                                    

               At the time of petitioners’ 1986 and 1987 transfers of funds           
          to UI, no documentation, such as loan agreements or promissory              
          notes, was drafted or executed by petitioners or by UI with                 
          regard to the funds petitioners transferred to UI.                          
               An informal understanding existed between petitioner and the           
          officers of UI that petitioners’ 1986 and 1987 transfers of funds           
          to UI would be repaid by UI to petitioners only out of UI’s                 
          future profits.                                                             
               At petitioner’s direction, beginning with the 1986 transfer,           
          UI’s accountant maintained a handwritten ledger showing a running           
          balance for the total funds that petitioners transferred to UI.             
          On the handwritten ledger, periodic entries were made to reflect            
          the accrual of alleged interest on the funds that petitioners               
          transferred to UI in 1986 and 1987.                                         
               During 1987, petitioner was paid approximately $42,000 by              
          UI.  At petitioner’s direction, this $42,000 was treated on UI’s            




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Last modified: May 25, 2011