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In the notice of deficiency (notice) issued to the Trust,
respondent determined that, in calculating its UBTI, the Trust
erroneously deducted in Forms 990-T for 1991 and 1992
(1) $1,424,371 and $1,588,555, respectively, as “Compensation of
officers, directors, and trustees” and (2) $156,084 and $264,974,
respectively, as “Other deductions”. Respondent made those
determinations because the Trust failed to establish that those
disallowed amounts constitute expenses directly related to, and
therefore deductible from, its investment income that it reported
as unrelated business income in Forms 990-T (i.e., $1,851,399 for
1991 and $1,155,793 for 1992).8
Discussion
On brief, the Trustee abandons the position that the Trust
took in Forms 990-T for 1991 and 1992 that, in calculating its
UBTI, it is entitled to deduct from unrelated business gross
income (1) “Compensation of officers, directors, and trustees” in
the amounts of $1,456,954 and $1,618,779, respectively, and
(2) “Other deductions” in the amounts of $156,084 and $287,450,
respectively. Instead, the Trustee argues on brief that
$1,580,455 of the Trust’s income for 19919 and $1,853,529 of the
8Respondent made no determinations in the notice regarding
the amounts of unrelated business income that the Trust reported
in Forms 990-T for the years at issue.
9The Trustee makes no argument about the balance of the
investment income (i.e., $270,944) that the Trust reported as
(continued...)
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