5
Bob Wade was the president of Bob Wade Ford at all times
relevant here. Petitioner originally owned 80 percent of the
stock of Bob Wade Ford. He became the 100-percent shareholder on
December 31, 1983.
Bob Wade Ford was a C corporation until the end of 1975. It
became an S corporation in 1976. Bob Wade Ford was an accrual
method taxpayer.
2. Petitioners' Role in the Management of Bob Wade Ford
When petitioner traveled to the United States from Panama,
he visited Bob Wade Ford and occasionally attended car auctions
with Bob Wade. Petitioner did not attend management meetings,
review the books, or do any work at the dealership. Petitioner
was not knowledgeable about the automobile sales business. Mrs.
Bohannon never worked at Bob Wade Ford.
3. Petitioners' Capital Contributions to Bob Wade Ford
In 1988, petitioner contributed $125,000 to Bob Wade Ford.
His allocable share of its 1988 loss was $254,752. He
contributed $275,000 in 1989, and his allocable share of the
corporate loss was $133,709. Bohannon, S.A. provided $25,000 to
Bob Wade Ford in 1989.
Petitioners deducted losses from Bob Wade Ford of $214,530
on their 1988 return and $105,767 on their 1989 return.
4. Bob Wade Ford's Tax Returns
No loans from shareholders were reported on Bob Wade Ford's
tax returns (Forms 1120S) for 1979, 1980, 1981, 1982, 1983, 1984,
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