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Vehicle Resale Business
Petitioner conducted a vehicle resale business as a sole
proprietorship. The vehicle resale business was reported on
petitioners' Schedule C under the name Coastline Ltd., Leo
Goldberg sole proprietor. Petitioners paid $125 and $3,650 from
Schwab account number 3843 for expenses of the vehicle resale
business.
During 1990 and 1991, Kortava transferred $72,544 of his
personal funds to petitioner to purchase cars for resale in
Russia. In 1990, petitioner received $38,000 from Kortava and
deposited this amount in California Federal account number 6130,
one of his personal accounts. Petitioners reported $72,544 in
gross receipts on Schedule C of their 1991 return. The contract
for the sale of vehicles required specific vehicles to be
delivered to Russia. If petitioner could not provide those
specific vehicles, the money was to be returned to Kortava in
Russia. When it was obvious that petitioner would not be able to
meet the requirements of the contract, the agreement was
modified, and petitioner sent to Russia his personal vehicle, a
1984 Mercedes Benz (Mercedes), and another replacement vehicle in
1991. The Mercedes had scratches and some additional damage when
petitioner shipped it to Kortava. Kortava wired to petitioner
$20,000 as consideration for petitioner's shipping the Mercedes
to Russia.
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