- 7 -
To make his determination as to petitioners’ income for
1991, respondent used the following information:
Source of funds:
Adjusted gross income $19,283
Loan balance 12/31/91 100,000
Bank account balances 1/1/91 7,081
Moneys advanced from daughter 4,500
Depreciation (noncash deduction) 4,620
Self-employment tax AGI deduction 1,133
Glenwood loan receivable 31,301
Cash on hand 1/1/91 3,000
Total sources available 1170,918
Application of funds:
Personal living expenses $23,780
Loan balance 1/1/91 99,013
Funds to construct house for daughter 30,301
Bank balance 12/31/91 284
Payment of father’s loan 34,001
Glenwood loan receivable 12/31/91 -0-
Increase in inventory 4,288
Increase to capital/Glenwood 4,379
Building improvements 6,067
Cash on hand 12/31/91 3,000
Total application of funds 205,113
Total sources available 170,918
Understatement of income 34,195
Less specific adjustments/rental income (6,000)
Understatement of income 28,195
1 Although the parties have stipulated $170,915, it
appears the correct amount is $170,918.
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Last modified: May 25, 2011