Daniel R. Leavell and Eva Lovene Leavell - Page 16

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                 At trial and on brief, petitioners provide confusing                                     
            information and ambiguous arguments concerning these two                                      
            transactions with Christa Oil.  During the trial, in response to                              
            a question from the Court as to whether petitioners had attempted                             
            to obtain the original records of Christa Oil, or its successor,                              
            regarding these transactions, the following dialogue occurred                                 
            between the Court and petitioners' counsel:                                                   

                 THE COURT:  Mr. Lumerman, do you know the status of Christa                              
                 Oil and the records?  Have you made any attempt to get the                               
                 records of Christa Oil with regard to the purchase by it of                              
                 the stock from Mrs. Leavell?                                                             
                 MR. LUMERMAN:  No, Your Honor, frankly, we haven't.                                      

                 We sustain respondent's determination on this issue in its                               
            entirety.                                                                                     

            Expenses of Various Businesses                                                                
                                             L & L Supply                                                 
                 As indicated, in 1984, Eva started an oil equipment sales                                
            business under the name of L & L Supply.  On Schedules C attached                             
            to petitioners' joint Federal income tax returns for 1985, 1986,                              
            and 1987, Eva claimed operating and/or trucking expenses of                                   
            $106,801, $53,941, and $124,454, respectively, relating to this                               
            business.  On audit, respondent disallowed for lack of                                        
            substantiation these claimed expenses of L & L Supply.                                        








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