- 9 -
$12,061 for income taxes owed by its limited partners and
reported the tax payments as distributions to its limited
partners.
For 1995, 1996, 1997, and 1998, the living trust used income
from Austin and Edna’s Social Security payments and the
guaranteed payments from KPLP to pay approximately $2,500 per
month to Pelican Lake Health Care Center for Edna’s care. Austin
and Edna reported medical expenses of $37,684, $38,586, and
$40,216 on their 1995, 1996, and 1997 Federal income tax returns,
respectively.
In June 1998, KPLP redeemed the U.S. savings bonds that
Austin and Edna had contributed in 1995. The U.S. Treasury
issued KPLP two checks for $43,638 each. One check was endorsed
to the National Western Life Insurance Co. to purchase an
annuity. On the annuity application, Dennis was named as the
annuitant, and the four Korby sons were named as the four equal
owners and beneficiaries. The other check was deposited into the
living trust’s checking account. KPLP did not report this amount
on its 1998 return as a distribution or a guaranteed payment to
the living trust. From these funds, the living trust issued a
$10,000 check to each of the Korby sons and retained the
remaining $3,638. KPLP reported the interest earned on the U.S.
savings bonds as income on its 1998 Federal income tax return.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011