-37-
There can be no doubt that petitioners exercised control over the
funds that were deposited in or transferred to their personal
accounts. We must decide whether the extent of their control was
such that they are taxable on the amounts that were transferred
from Kortava in the years of the transfers.
The transfers from Kortava went into two accounts:
California Federal account number 6130, in petitioner's name, and
California Federal account number 6250, in Coastline's name.
Petitioners then transferred these funds to other Coastline
accounts and to their own savings account.
Petitioners claim that the funds that were transferred to
their personal savings account were payment for petitioners'
Mercedes that was sent to Russia and payment for petitioners'
interest in Martis Landing and Saddle Rock.
Mercedes
We have found as a fact that Kortava transferred $20,000 to
petitioner as consideration for petitioner's sending his Mercedes
to Russia. Petitioner did not report this amount on his 1990
return. Respondent determined that this amount represented
unreported income.
When it became apparent that petitioner would not be able to
meet the requirements of specific vehicles as contemplated by the
agreement between Kortava and petitioner, petitioner sent his
personal car, the Mercedes, to Russia. The acquisition expense
of the Mercedes was not shown on the Schedule C for 1990 or 1991.
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