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Petitioner also claimed losses of $3,596 for 1979 and $4,140
for 1980 from the Franklin Green partnership. However, there are
no invoices, canceled checks, or other primary records of the
Franklin Green partnership in evidence for 1979 and 1980. Hence,
it cannot be established that Franklin Green partnership paid
expenses that were ordinary and necessary expenses resulting in
distributive partnership losses. Therefore, petitioner is not
entitled to the claimed losses from Franklin Green partnership in
computing 1979 and 1980 taxable income.
Similarly, petitioner claimed losses from the McZand
Corporation, a subchapter S corporation, of $11,997 for 1979 and
$39,147 for 1980. He became the sole shareholder of McZand
Corporation in 1979. No canceled checks, invoices, or other
primary records of McZand Corporation for 1979 and 1980 are of
record for these claimed losses. The McZand Corporation's return
for 1979 reported an $85,317 gain from the sale of Westgrove real
estate to petitioner as sole shareholder. However, McZand
Corporation did not include that amount in calculating its
income.
In March 1980 petitioner transferred 100 percent of his
ownership in McZand Corporation to Caspian Florida, a subsidiary
of CDC.
Petitioner is not entitled to McZand Corporation losses of
$11,997 and $39,147 in computing 1979 and 1980 income.
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