- 13 -
Year Gross Sales Proceeds
1983 $4,762,863
1984 5,583,176
1985 5,919,630
1986 4,941,356
Petitioner did not report any portion of the sales proceeds as
gross receipts on its income tax returns for the years in issue.
Petitioner deducted certain payments to the RSC as ordinary and
necessary business expenses, including the loss from sales of
residences to third parties at a price below the appraised value.
Respondent disallowed the deduction against ordinary income on
the ground that the payments were capital losses. Respondent
increased petitioner's taxable income in the following amounts:3
Year Increase
1983 $227,208
1984 733,953
1985 707,805
1986 490,134
Petitioner did not report any capital gain or loss during the
years in issue.
OPINION
Petitioner contends that its payments to the RSC to assist
relocating employees in selling their residences are a form of
3 Respondent's determination is expressed as a single
adjustment for each taxable year in issue. In the determination,
respondent treated petitioner as the owner of the residences and
treated certain payments to the RSC as capital rather than
ordinary income items. However, it is not clear from the briefs
or record how respondent computed the adjustment to petitioner's
taxable income and which relocation expenses were disallowed.
Because of our conclusion that petitioner is not the owner of the
residences in either substance or form, it is unnecessary for us
to analyze that aspect of the adjustment.
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011