- 15 - On November 4, 1986, Eva, for a total stated consideration of $1,828,000, sold back to Christa Oil the above partial interests in the three oil leases that she had received in November of 1985. Of the total stated consideration, $100,000 was to be paid to Eva in cash, and the $1,728,000 balance due under the contract with Christa Oil was to be reflected by the assignment to Eva of a specified number of barrels of oil to be produced from wells owned by Christa Oil, and by Christa Oil's commitment to make cash payments to Eva to the extent the barrels of oil Eva actually received under this contract and the $100,000 downpayment were not adequate to fully pay Eva the total $1,828,000 due under this contract. On audit and based on records of Christa Oil, respondent determined that Eva received under the above 1985 and 1986 transactions with Christa Oil, $66,913 in 1985, $165,923 in 1986, and $518,278 in 1987, in additional payments from Christa Oil. Respondent treated these payments as additional capital gain income to petitioners for each respective year. During the audit, petitioners provided respondent's representatives no information regarding the amount Eva received on the above transactions. Petitioners have not established that these payments were reported anywhere on their joint Federal income tax returns.Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
Last modified: May 25, 2011