- 56 -
Commissioner, 391 F.2d 775 (8th Cir. 1968), revg. T.C. Memo.
1965-154; Doug-Long, Inc. v. Commissioner, 73 T.C. 71 (1979);
sec. 1.535-2(a)(1), Income Tax Regs. Accordingly, we use the
amount of Federal income tax shown on petitioner’s return.
TYE 8/31/90
9. See note 1.
10. See note 2.
11. See note 3.
12. See note 4.
13. See note 7.
14. See note 8.
TYE 8/31/91
15. Operating expenses should include the amount of
consulting fees paid to Mohney, which petitioner properly
deducted as an ordinary and necessary business expense.
16. No estimated Federal income tax payments were in fact
made. Arguably, estimated tax payments should be included in
operating expenses even if not actually made, because
petitioner would have expected to comply with the requirement
to pay estimated tax in the following taxable year. For the
sake of consistency we include only estimated taxes that
petitioner paid, but this should not distort the results of our
analysis. The unpaid tax seems to have been included in the
amount of “current liabilities” stated on Form 1120, Schedule
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