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related penalty for 1989.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulations of fact filed by the parties and the
accompanying exhibits are incorporated herein by this reference.
When petitioners filed their respective petitions, Alice Berger
resided in Vermont, and Howard Berger and Susan Berger resided in
Florida.
Howard Berger and Alice Berger were married in 1953. During
the marriage, Alice Berger was not employed outside the home.
Prior to 1979, Howard Berger was an insurance salesman, and he
continued to receive renewal commissions through 1989.
In 1979, Howard Berger purchased the Woodbine real property
and cemetery business, located in Oceanport, New Jersey, from
John and Lois Flock, for $100,000. The Flocks had operated
Woodbine as a cemetery for in-ground interments.
Howard Berger continued the business of operating Woodbine
as a cemetery for in-ground interments. From 1979 through 1989,
the income of Woodbine from the sale of cemetery plots, interment
fees, and headstones was reported on the cash basis method of
accounting, as were most expenses. However, the cost of grave
plots ($23 per plot) was carried in an inventory account and
expensed for accounting and tax purposes when plots were sold.
By deed dated October 26, 1983, Howard Berger transferred
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