- 3 - in aid of construction") and deposited this amount in an interest-bearing checking account in the names of McArthy and Imperial at Lemay Bank & Trust Co. The account bore McArthy's Social Security number as the taxpayer identification number, and interest earned on the account was paid to McArthy. Funds could be withdrawn from the bank by checks signed by both Fribis, as president of Imperial, and McArthy. Imperial contracted with McClanahan Contracting (McClanahan), a partnership of which Fribis was a partner, to install the sewer main-line extension and expand Manor. The cost of extending the main-line from Manor to Brookshire was $350,000. Imperial paid approximately $150,000 of this cost and the remainder consisted of the $200,000 from the escrow account. The expansion of Manor cost $190,000. The escrowed funds were credited toward the $400 per pad "contribution in aid of construction fee". As such, Imperial did not charge McArthy a fee to connect each mobile home to the sewer system. From the escrow account, $164,375 was disbursed in 1988 and $35,625 was disbursed in 1989 to subcontractors and contractors working on the construction of the sewer pipeline, including Price Bros., Klueter Bros., McClanahan, and Fred Weber Inc. Imperial now owns the sewer line extension. On its 1988 Federal income tax return, petitioner included in gross income the $164,375 disbursed from the escrow and claimed depreciation in connection with those disbursements.Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011