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petitioner for 1990. Thus, the loss of $336,912 claimed
by petitioner on its amended return for 1990 had already
been claimed on petitioner's return for 1990.
On May 5, 1992, petitioner issued a check to itself in
the amount of $246,950.45, as reimbursement for the amounts
paid from account 312 for the personal expenses referred to
above. On September 14, 1992, petitioner issued a second
check to itself in the amount of $179,005, as reimbursement
for the receipts that had been misclassified as funds
contributed to petitioner by Edmund J. Cordes and deposited
to account 312 during 1990. Both of these checks, in the
aggregate amount of $425,955.45, were charged to
petitioner's account 312.
Respondent mailed a notice of deficiency pertaining
to petitioner's 1990 return in which respondent determined
the deficiency in income tax and penalties set out at the
beginning of this opinion. In computing the subject
deficiency, respondent made the following three adjustments
to petitioner's 1990 return:
Other income $5,107,102
Other deductions-- 175,104
repossession costs
Bad debts (736,331)
Total adjustments 4,545,875
The adjustment labeled other income is composed of the
following items:
Additional interest income $3,084,179
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