Andrew and Margita Zards et al. - Page 13

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          petitioners apparently rely on a stipulated exhibit to satisfy              
          their burden of proof.  That stipulated exhibit (Exhibit 52) is             
          described as "a copy of ledger sheets pertaining to expenses                
          relating to the property in issue in the taxable years 1986,                
          1987, and 1988."  Respondent, however, stipulates "only that                
          Petitioners' Exhibit 52 represents a listing of expenses relating           
          to the property in issue and does not stipulate that petitioners'           
          Exhibit 52 had any legal substance or represented bona fide debts           
          incurred by Good Shepherd."  Petitioners have made no attempt to            
          tie the entries on Exhibit 52 to the deductions claimed on Good             
          Shepherd's returns.  Petitioners have provided virtually no                 
          documents, such as canceled checks, invoices, or bank statements            
          to back up the entries on Exhibit 52.  Only one canceled check is           
          in evidence, a check in the amount of $25,000, drawn to Lino                
          Engineering Co.  Vebeliunas testified that Lino Engineering was             
          contracted for "renovation and change" at the property.  Thus, it           
          is not clear that the payment is deductible at all, because it              
          may well be a capital expenditure.  See sec. 263(a).  Also in               
          evidence are statements showing payments of $1,625, $2,887,                 
          $6,250, $2,025, $325, $820, and $12,143 to various individuals in           
          1988.  Since there are no deductions on Good Shepherd's return              
          for 1988 for (1) compensation to officers or (2) salaries or                
          wages, we assume that those payments, if made, were for                     








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