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loss.
On September 13, 1990, approximately 1 month prior to the
filing of Alice Berger's 1989 income tax return, the Internal
Revenue Service had issued a report, Form 4549, in connection
with the examination of the 1988 income tax return of Howard and
Alice Berger. The report took the position that Phase II
mausoleum crypt sales payments were taxable Schedule C income in
the amount of $229,396 to Howard and Alice Berger. The statutory
notice issued by respondent to Howard and Alice Berger for 1988
determined that their Schedule C gross income in respect of
Woodbine should be increased by $491,432 in respect of Phases II
and IIIA mausoleum crypt sales payments, without any offset for
the costs allocable thereto.
On March 18, 1991, the Internal Revenue Service issued a
report, Form 4549, in connection with the examination of the 1989
income tax return of Alice Berger. The report took the position
that Alice Berger's Schedule C taxable income from Woodbine
during the year amounted to $208,889. The report also took the
position that Alice Berger realized and recognized taxable income
of $604,055 on the sale of Woodbine, allowing a cost basis equal
to $75,945. The statutory notice issued by respondent to Alice
Berger for 1989 determined that her gross income from Woodbine
should be increased by $475,112 in respect of mausoleum crypt
sales payments, without any offset for the costs allocable
thereto, and also determined that she realized and recognized
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