Forest L. Buckmaster - Page 6

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            Form 1041 claimed a $17,197 loss on its rental of the residence,                             
            which was used to offset the $24,123 of net income from                                      
            petitioner's services.  Ideal Management's 1992 "Total income" of                            
            $6,926 ($24,123 - $17,197) was reportedly distributed to Clark                               
            during that year.                                                                            
                  Respondent analyzed the deposits made during 1992 into the                             
            joint account and the Ideal Management account.  The deposits                                
            into the Ideal Management account aggregated $75,553, and the                                
            deposits into the joint account equaled $5,606.  Based on her                                
            analysis, in the context of the surrounding facts, respondent                                
            determined that petitioner failed to report self-employment                                  
            income of $73,021.  Respondent also determined that petitioner                               
            was liable for self-employment tax of $8,961 on this unreported                              
            income.  Respondent stated in the notice of deficiency that Ideal                            
            Management was a grantor trust or, alternatively, a sham.                                    
                  On or about November 3, 1995, respondent filed a Federal tax                           
            lien against petitioner.  The lien arose from petitioner's 1990                              
            and 1991 taxable years.  Respondent assessed petitioner's                                    
            liability for these years on December 12, 1994, and July 3, 1995,                            
            respectively.  Petitioner's liability for the assessed amounts                               
            aggregated almost $100,000 on the date of the lien.                                          
                  We must decide whether the income earned by petitioner and                             
            paid to Ideal Management during 1992 was includable in                                       
            petitioner's 1992 gross income.  Respondent argues that it was,                              

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