Kenneth W. Stejskal, Sr. and Jane Stejskal, et al. - Page 4

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          Trust, with a small portion conducted under the name Bioactive              
          Kansas Trust.  During 1999, the business was conducted through              
          retail stores in Kansas and one store in Texas.  Separate books             
          and bank accounts were maintained for the Kansas stores and the             
          Texas store.                                                                
               Bioactive Kansas Trust filed a Form 1041, U.S. Income Tax              
          Return for Estates and Trusts, for 1999.  On Schedule C, Profit             
          or Loss From Business, Bioactive Kansas Trust reported gross                
          receipts of $66,003.  The gross receipts reported by Bioactive              
          Kansas Trust were attributed to petitioners in the statutory                
          notice of deficiency sent to petitioners.                                   
               Stejskal Enterprises Trust filed a Form 1041 for 1999.  On             
          Schedule C of that return, Stejskal Enterprises Trust reported              
          gross receipts of $781,121 and cost of goods sold of $397,751.              
          The cost of goods sold amount was computed on the Schedule C as             
          follows:                                                                    
               Inventory at beginning of year          $171,607                       
               Purchases                                448,052                       
               Total                                  619,659                         
               Less:  Inventory at end of year          221,908                       
          Total cost of goods sold              $397,751                              
          The trial balance for Stejskal Enterprises Trust as of                      
          December 31, 1999, showed purchases in the amount of $397,751.              
          The beginning inventory reported on Schedule C coincided with the           
          amount reported at the end of 1998.  Neither the trial balance              
          nor any other record produced by petitioners showed an amount for           





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