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Whether petitioner Toraya Corp. (Toraya) received unreported
income from sales in the amounts of $94,500, $102,275, $81,506,
and $58,271 for 1988, 1989, 1990, and 1991, respectively, as
shown by cash deposits made by the Kudos5 and cash deposits and
cash purchases made by the Takaos during those years. We hold
that Toraya received unreported income in the amounts decided
herein.
(2) Whether Toraya is entitled to deduct payments,
classified as office expenses, made to Motomi in 1988 and 1989 in
the amounts of $7,933 and $12,000, respectively. We hold that it
is to the extent decided herein.
4(...continued)
years in issue.
10. Respondent concedes the adjustment for "Repairs
Expenses" for 1989.
11. Respondent concedes adjustments for "Earthquake Damage"
for 1989.
12. Respondent concedes the adjustment for "Payment from
Franchise Tax Board" for 1988.
13. Respondent concedes that Toraya is entitled to a
$25,460 Targeted Jobs Credit and an Investment Tax Credit of
$4,450 in 1988.
14. Toraya concedes the adjustment for "Gain on disposition
of vehicles" for 1990.
15. Respondent concedes adjustments for "Employee Benefits
Expense" for 1988 and 1989.
16. Petitioner and Toraya agree that Toraya is entitled to
deductions for imputed interest expense as follows:
1988 $10,012
1989 7,992
1990 7,699
1991 6,310
5 Respondent conceded on opening brief that cash deposits
into the Kudos' bank accounts in the amounts of $42,506 for 1990
and $46,871 for 1991 are not gross receipts of Toraya.
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