Charles A. Ballard - Page 4

                                        - 4 -                                         
          would be forthcoming and willing to pay a large enough daily                
          charter fee so that he would break even on his investment with              
          the boat being chartered only 3 to 5 days a month.                          
               Petitioner made his Federal income tax returns for 1986 and            
          1987 on the basis of a calender year.                                       
          Ballard Marine                                                              
               Ballard Marine, a Maine corporation, was organized on                  
          September 2, 1986.  The articles of incorporation of Ballard                
          Marine fail to state any purpose for which the corporation was              
          organized.  Petitioner was the sole initial director of the                 
          corporation.  The initial officers of Ballard Marine were a                 
          president and a treasurer.  Petitioner was appointed to both                
          offices.  Ballard Marine elected to be an S corporation within              
          the meaning of section 1361(a).  Ballard Marine’s election to be            
          an S corporation was effective for its first taxable year.                  
          Ballard Marine is a calender year taxpayer.                                 
               By contract dated October 17, 1986, Ballard Marine purchased           
          a 49-foot, MY MK III Gulfstar motor yacht (the yacht) for a total           
          contract price of $300,000.  Ballard Marine also paid a Florida             
          sales tax of $15,000.  Ballard Marine financed $175,000 of the              
          purchase price of the yacht with a bank loan.  The yacht was                
          delivered to Ballard Marine on October 23, 1986, in Annapolis,              
          Maryland.                                                                   
               In connection with Ballard Marine’s purchase of the yacht,             
          Ballard Marine, or petitioner, consulted with legal counsel.                




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011