Estate of Robert E. Cartwright, Deceased, Dorothy G. Cartwright, Executrix - Page 9

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          California when he died.  His widow, Dorothy G. Cartwright, was             
          appointed executrix of his estate on August 18, 1988.                       
               In June 1988, the following people owned CSB stock:                    
          Shareholder       Ownership Percentage   Number of Shares                   
          Robert E. Cartwright       71.43               10,000                       
          Jack L. Slobodin           10.71                1,500                       
          Robert U. Bokelman          3.57                  500                       
          Philip Borowsky             3.57                  500                       
          Harry F. Wartnick           3.57                  500                       
          Michael B. Moore            3.57                  500                       
          Lee S. Harris               3.57                  500                       
           199.99               14,000                                                
               1 The stipulation does not state why the ownership                     
          percentages total only 99.99 percent.                                       
          F.   The Estate’s Receipt and Tax Treatment of the Life Insurance           
               Proceeds                                                               
               Prudential paid CSB $5,062,029 from the two life insurance             
          policies.  This amount included the $2,500,000 death benefit                
          under each of the two policies and $62,029 in premium adjustments           
          and interest.                                                               
               CSB paid $5,062,029 to the estate on December 1, 1988.                 
          Sometime after December 31, 1988, CSB filed a Form 1099-MISC with           
          the Internal Revenue Service reporting that it paid $4,080,256              
          to decedent's estate in 1988 for nonemployee compensation.5                 


               5 Petitioner points out that respondent could have issued a            
          deficiency notice to CSB taking a position inconsistent with                
          respondent's position in this case and, upon CSB's filing a                 
          petition in this Court, moved to consolidate the two cases.                 
          See Cooney v. Commissioner, 65 T.C. 101, 107-108 (1975) (the                
          Commissioner may take inconsistent positions with different                 
          parties to protect the revenue); Foxman v. Commissioner, 41 T.C.            
          535, 548 (1964), affd. 352 F.2d 466 (3d Cir. 1965).  We note that           
                                                             (continued...)           



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