- 6 -
for their services. Petitioner's responsibilities at that store
included buying and selling clothes and assisting in the mainte-
nance of its books, and the responsibilities of Ihsan Dura, who
was a tailor, included buying and selling, and supervising the
tailoring of, clothes.
In order to purchase inventory for Linea Pitti, during 1986,
a third party made a $108,312 payment to a clothing manufacturer
on behalf of C & I. In January 1987, $53,000 was deposited into
the C & I bank account, and C & I's financial workpapers recorded
that deposit in the officers' loan account. By March 31, 1987,
the officers' loan account in C & I's financial workpapers
reflected funds advanced by C & I's officers in the total amount
of $128,193.71. As of March 31, 1987, the officers' loan account
shown in C & I's financial workpapers included a security deposit
in the amount of $25,365.21 that had been advanced by petitioner
on behalf of that corporation. The corporate income tax return
(Form 1120) filed by C & I for its taxable year ended September
30, 1987, showed that, as of that date, C & I's account desig-
nated "Loans from stockholders" had a balance of $122,246.
During 1986, petitioner spent at least the following amounts
on the items indicated:
Expenditure Amount
Home mortgage $19,800
State and local taxes 2,371
Car payments 2,340
Credit card payments 2,400
Total 26,911
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