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and by $200,909 for its taxable year ended July 31, 1990, for
total gross receipts of $750,112 for 1989 and $714,322 for 1990.
Petitioner stipulated to the additional gross receipts for each
year. The $135,934 plus the $200,909 totals $336,843, which
includes the full $248,662 of No. 2's gross receipts plus
$88,181. Respondent determined that $88,181 of gross receipts
deposited in petitioner's bank account during August of 1990
should be removed from petitioner's taxable year ended
July 31, 1991, and included in its taxable year ended July 31,
1990. The deficiency notice shows that the gross receipts for
the taxable year ended July 31, 1991 were reduced by $88,181.
The deficiency notice allocated the $47,754 of No. 2's costs
of sales to petitioner, $39,581 to its taxable year ended
July 31, 1989, and $8,173 to its taxable year ended July 31,
1990. The record does not indicate the basis for the allocation.
That adjustment increased petitioner's deductions for costs of
sales from $210,441 to $250,022 and from $85,457 to $93,630 for
those years, respectively. Petitioner has not challenged that
adjustment.
Of the $3,861 of interest income No. 2 reported on its
return for taxable year ending April 30, 1990, the deficiency
notice allocated $1,336 to petitioner's income for its taxable
year ended July 31, 1989, and $2,525 to its taxable year ended
July 31, 1990, thus increasing petitioner's total interest income
to $2,671 and $4,275 for those respective years. The record does
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