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FINDINGS OF FACT2
Petitioners resided in Laguna Hills, California, at the time
their petition was filed. Petitioners’ 1986 Federal income tax
return was filed on July 29, 1988. Petitioners' 1989 Federal
income tax return was filed during October 1990.3 Charles R.
Bowden and Sue I. Bowden were the sole officers and shareholders
of approximately 12 corporations.4 Petitioners and their
corporations were primarily engaged in the business of buying,
selling, financing, and operating water vending machines (vending
machines). These vending machines purified water by reverse
osmosis.
Mr. Bowden, as president of each corporation (with the
exception of C.B. Crest), managed the salespeople, promoted
1(...continued)
carryforward issue is deemed conceded by petitioners. See Rule
142.
2 The parties’ stipulations of facts and exhibits are
incorporated by this reference.
3 The filing date on petitioners’ 1989 return is clear as to
the month and year (Oct.--1990) but the exact day is not clear.
Petitioners signed their 1989 return on Oct. 14, 1990.
4 For our purposes, the corporations involved in this case
included but were not limited to: (1) Purified Water Inv. Corp.
(PWIC); (2) Purified Water Manufacturing Corp. (PWMC); (3)
Aqualator Vending Corp. (AVC); (4) Aqualator Intl. Corp. (AIC);
(5) Aqualator Serv. Corp. (ASC); (6) Aqualator Manufacturing
Corp. (AMC); (7) Aqualator R&D Corp. (Aqualator R&D); (8) C.B.
Crest, Inc. (C.B. Crest); (9) Septech, Inc. (Septech); (10) Pac-
Tech Capital Corp. (Pac-Tech); and (11) The Water Doctor, Inc.
(Water Doctor, Inc.).
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