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turn. Companies that were able to sell land, like EIC, did so by
developing superior marketing techniques or by utilizing connec-
tions with overseas buyers.
Accounting Methods
EIC keeps its books and records on the accrual basis for the
purpose of preparing its financial statements. For tax purposes,
during the years in issue, EIC and petitioner elected to use the
installment method for reporting income in their tax returns.
This is the second instance where petitioner has been
involved in litigation before the Tax Court. Previously,
respondent issued petitioner and Mrs. Wang notices of deficiency
for their 1979 and 1980 Federal income tax returns. The most
significant portion of the deficiencies for the 2 years related
to the income and expenses respondent determined in connection
with the Wangs' land sales activities. Petitioner and Mrs. Wang
presented these issues to this Court in a trial that was held on
November 30, 1989, and December 1, 1989. However, no opinion was
issued because all of the issues were resolved by the parties
after the trial. The parties executed a closing agreement on
final determination covering specific matters for the 1979 tax
year (the 1979 closing agreement).4 A decision was entered
4No closing agreement was executed for the 1980 tax year.
The following constitutes the closing agreement for 1979:
WHEREAS, taxpayers' 1979 income tax return, Docket No.
(continued...)
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