Doyle A. King - Page 7

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               The prepayment credit was erroneously taken into                       
          consideration prior to arriving at the deficiency figure. The               
          deficiency should have been calculated without taking into                  
          consideration prepayment credits.                                           
               The notice of deficiency issued to Yvonne was based upon the           
          adjustments in the following chart:                                         
               Item and Source                       1990      1991                   
               One-half of Doyle's wages - IRP     $1,200      $500                   
               Interest - IRP                         221       370                   
               one-half of Doyle's two                                                
               Schedules C net income               4,538     4,728                   
               Schedule C                                                             
               Yvonne King Real Estate                                                
               (1990 IRP income, CPI expenses)   91,663      -0-                      
               (1991 CPI applied to the 1990 figures)        95,513                   
               Rental income - source unknown        -0-    8,000                     
               Exemption deduction                 (2,050)  (1,118)                   
               Self-employment tax deduction       (3,925)  (4,590)                   
          _  _                                                                        
          Mortgage interest deduction -                                               
             1990 and 1991 - IRP              (5,411)         (7,536)                 
                Total adjustments                  86,236     97,503*                 
                *Per the deficiency notice.                                           
          Income tax                               24,389     26,784                  
          Prepayment credit                         3,330        -0                   
          Income tax balance                       21,059     26,784                  
          Self-employment tax                       7,849      9,180                  
          Total tax liability                      28,908     35,964                  
          The prepayment credit was erroneously taken into                            
          consideration prior to arriving at the deficiency figure. The               
          deficiency should have been calculated without taking into                  
          consideration prepayment credits.                                           
          For 1990 and 1991, petitioners had income, as reflected in                  






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