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Tax Return
Petitioners requested and received approval of their
Application for Additional Extension of Time To File their 1989
Federal income tax return until October 15, 1990. The dates
appearing next to petitioners' signatures on the return are both
November 4, 1990. The Internal Revenue Service (IRS) received
the return on November 13, 1990.
Petitioners reported an adjusted gross income of $32,856,
which consisted of Mr. Bowers' wages from TAI of $27,600,
Schedule E income from TAI of $4,929, and $327 from Deborah's
modeling. Petitioners reported no income from any of Mr. Bowers'
other business interests. Mr. Bowers' Form W-2 from TAI shows
his address as that of the Mandarin house.
Petitioners completed Form 2119 (Sale of Your Home) and
attached it to their return. On this form, petitioners reported
the sale of the Burlington property for $320,000, an adjusted
basis in that property of $182,634, and a gain of $137,366.
Petitioners did not indicate any fixing-up expenses on the
Burlington house, nor any selling expenses. They reported the
cost of a new residence as $370,273.
The IRS examined petitioners' return and disallowed the
deferral of gain from the sale of the Burlington property on the
ground that petitioners had not shown that they used the
20(...continued)
moved to Florida, let alone Mr. Bowers.
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