- 4 -
amount of $124,879. Prior to trial, respondent conceded $39,648
of the adjustment for 1988. Thus, respondent now claims
petitioners' income for 1988 was understated in the amount of
$85,231.
Respondent determined that petitioners failed to report the
following amounts of bank deposits as income for the taxable year
1987:
I.H.R-L LTD bank account $103,514
Ferry Associates bank account 22,503
$126,017
plus
Personal expenses paid from
MIT LTD bank account 8,126
Less W-2 reported income from
Wayanne, Inc. (3,911)
Difference 4,215
1987 understatement 130,232
Respondent determined an understatement based on bank
deposits in 1988 as follows:
I.H.R-L LTD bank account $47,458
Ferry Associates bank account 12,175
R.E.P., LTD bank account 24,290
$83,923
plus
Personal expenses paid from
MIT LTD bank account 1,308
1988 understatement 185,231
1 Apparently, respondent's concession for 1988 described
above takes into account the Form W-2 wages reported from
Wayanne, Inc.
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