- 3 -
Category of deduction 1989 1990
Depreciation .................. $13,367.00 $13,180.00
Net operating loss carryover... 231,102.00 266,331.00
Interest....................... 19,010.46 20,236.32
Repairs........................ 123.00 300.00
Rents.......................... 940.00 850.00
Fees and expenses of C.M. Byrne III 276.72 500.00
Management fees of Charles Byrne 500.00 4,156.30
Insurance...................... 4,084.00 2,353.00
Office expenses................ 489.80 72.80
Telephone...................... 1,028.00 2,173.00
Auto........................... 2,318.63 3,285.36
Travel......................... 166.00 -0-
Professional services.......... 370.00 -0-
Dues and subscriptions......... 158.00 157.60
(2) Is petitioner liable for the accuracy-related penalty
for negligence under section 6662(a) in the amounts of $2,457.00
and $17,632.00 for 1989 and 1990, respectively?
Some of the facts have been stipulated and are found
accordingly. The stipulation of facts and attached exhibits are
incorporated herein by this reference.
FINDINGS OF FACT
Petitioner, National Industrial Investors, Inc. (NII), is a
California corporation. Since its inception, its principal place
of business, office address, and office address of all of its
subsidiaries has been 956 Jackling Drive, Hillsborough,
California, the residence of Charles M. Byrne (Byrne).
Byrne owned 51 percent of the stock of NII from 1972,
shortly after NII's incorporation, until 1980, when he divided
his interest among his wife and children. A non-Byrne minority
shareholder, McMahon, was bought out in early 1988, and when
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