- 3 - (1) Whether partially refundable entry fees paid by residents of the apartment and lodge units are includable in income in the year of receipt as advance payments or prepaid rent or are deposits to be reported ratably in accordance with the accrual of nonrefundable or nonforfeitable portions; (2) whether the purchase prices paid by cluster home or condominium purchasers are sales receipts3 or are loans or financing arrangements; and (3) whether petitioner Highland Farms, Inc. is liable for the addition to tax under section 6661. FINDINGS OF FACT Some of the facts have been stipulated and are so found. The stipulation of facts and the exhibits attached thereto are incorporated herein by this reference. Highland Farms, Inc. (petitioner), is a corporation duly organized and existing under the laws of the State of North Carolina. Petitioner's principal place of business was located in Black Mountain, North Carolina, at the time it filed the petition in this case. Petitioner is the parent corporation of its wholly owned subsidiary, Highland Farms Associates, Inc. (...continued) is, the unrecognized portions of the cluster home or condominium receipts equivalent to the repurchase liabilities. This concession is consistent with respondent's treating the cluster home or condominium transactions as sales. In the notice of deficiency, respondent was, in effect, including both the gross amount of the sales receipts and the gain from the sales. 3 The resolution of this issue will determine whether petitioner Highland Farms, Inc. is allowed depreciation for the cluster homes and condominiums.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011