- 11 - supports herself and the three children with full-time employment and has a modest standard of living. In June of 1991, petitioner graduated from the College of San Mateo with a degree in business. For 1986, 1987, and 1988, petitioner and Mr. Makalintal filed joint Federal income tax returns. These returns were prepared by Katie Yue, an independent certified public accountant. The table below summarizes for 1986, 1987, and 1988, the gross income, itemized deductions, and taxable income that were reported on these joint Federal income tax returns. Gross Itemized Taxable Year Income Deductions Income 1986 $34,006 $89,352 $-0- 1987 33,945 29,268 -0- 1988 73,544 72,236 -0- On the tax return for 1986, no income was reported with respect to Mr. Makalintal’s sale in the Philippines of his stock in ICPI for $3 million. When Ms. Yue prepared Mr. Makalintal and petitioner’s 1986 joint Federal income tax return, Ms. Yue expressed concern to her supervisor at the accounting firm that income reported on the return was not sufficient to support Mr. Makalintal and petitioner’s lifestyle. Ms. Yue's supervisor then questioned Mr. Makalintal specifically with respect to the income reported, and Mr. Makalintal explained that additional nontaxable financialPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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