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brother. Petitioner paid I.J. Zand $100,000 in 1978 and deducted
that amount on his 1978 Federal income tax return. Respondent
has conceded that this payment was deductible in 1978. CTC's
1979 disbursement journal lists an account payable to I.J. Zand
on June 15, 1979, in the amount of $50,000. However, neither
petitioner's books nor other evidence show when this account
payable to I.J. Zand was paid, if at all. Petitioner deducted
the $50,000 on his 1979 income tax return. Therefore, the
consulting fee in the amount of $50,000 to I.J. Zand is not
deductible by petitioner in 1979 because he has not shown that
the amount was paid.
F. Claimed Deductions for Management Fees
Caspian Development Company (CDC) was incorporated on
September 17, 1976, and 100 shares of stock were issued.
Petitioner held 51 voting shares, Mr. Khalatbari held 24 voting
shares, Diana Khalatbari held 24 nonvoting shares, and Priscilla
Meier held 1 nonvoting share. The officers of CDC were
petitioner, president; Joe Dinunzio (petitioner's son-in-law),
vice president; Clem Meier, vice president; and Priscilla Meier,
secretary.
CDC was described as a payroll company. CDC had a number of
subsidiaries during the years at issue, including Caspian
Electric Company, Caspian Farms Systems, Caspian Machinery, and
Charleston, Inc. In addition, CDC owned Madison County Farm.
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