Estate of Melvin W. Ballantyne, Deceased, Jean S. Ballantyne, Independent Executrix, and Jean S. Ballantyne - Page 8




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          did not always maintain a cash disbursements journal or a cash              
          receipts journal.  Mr. Feldmann was never provided with a                   
          complete listing of BBP’s assets and liabilities, and he never              
          prepared a balance sheet for the partnership.10  Neither the                
          partnership nor Mr. Feldmann prepared yearend trial balances.               
          Partnership capital accounts for BBP were never maintained.  The            
          1993 and 1994 Forms 1065 reported that Melvin and Russell had               
          balances of “0" in their respective capital accounts at both the            
          beginning and the end of those taxable years.11  On the 1993 and            
          1994 Forms 1065, BBP reported on the Schedules L, Balance Sheet,            
          that the total assets and total liabilities of the partnership at           
          the beginning and the end of those taxable years were “None”.12             
          A calculation of each partner’s capital contributions to the                
          partnership cannot be made given the state of BBP’s records.                
          Additionally, a calculation of the distributions made to each               


               10In the mid-1980s, Mr. Feldmann recommended that BBP                  
          maintain a balance sheet showing the partnership’s assets and               
          liabilities.                                                                
               11For the taxable years 1980 through 1992, the areas                   
          designated on the Forms 1065 and Schedules K-1, Partner’s Share             
          of Income, Credits, Deductions, Etc., attached to the Forms 1065            
          pertaining to information concerning Melvin’s and Russell’s                 
          respective capital accounts were left blank.  For the taxable               
          years 1993 and 1994, the Forms 1065 were also left blank;                   
          however, the Schedules K-1 listed the amounts in Melvin’s and               
          Russell’s respective capital accounts at the beginning and end of           
          those taxable years as “0".  Russell signed BBP’s partnership tax           
          returns for the years 1993 and 1994.                                        
               12For the taxable years 1980 through 1992, the Schedules L,            
          Balance Sheet, on BBP’s Forms 1065 were left blank.                         





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