Amdahl Corporation and Consolidated Subsidiaries - Page 13

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                         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.                                                             
               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.                                   

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