- 7 - his other expenses associated with bond forfeitures in 1988 from sources other than the BUF accounts. Petitioner does not have access to his BUF accounts until the agreement is terminated and all outstanding bonds and all other liabilities petitioner may have to Associated are satisfied. Either petitioner or Associated may terminate the agreement, with or without cause, subject to certain notice requirements. Upon termination of the agreement and satisfaction of all liabilities secured by the BUF accounts, the balance in the BUF accounts is required to be released to petitioner. On his tax returns since 1968, petitioner offset his gross receipts by the amount contributed to his BUF accounts as a portion of cost of goods sold. However, the parties have stipulated that the offsets claimed by petitioner for payments to the BUF accounts are not properly claimable in any taxable period. Rather, if a forfeiture occurs and Associated is paid out of a BUF account, the amount so paid is properly deductible in the year payment is made. Petitioner reported most, but not all, of the interest accumulated on his BUF accounts on his Federal income tax returns for the taxable years 1968 through 1988. Pursuant to the practice used by petitioner for accounting for his BUF accounts from 1968 through 1988, petitioner did not claim as deductions on petitioners’ tax returns forfeitures or summary judgments paid from the BUF accounts maintained for him.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