Grady Whitlock Leasing Corporation - Page 2

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          for accrued tax expenses where petitioner otherwise uses the cash           
          method of reporting.                                                        

               This case was submitted fully stipulated under Rule 122.1              
          The stipulation of facts is incorporated herein and found                   
               Petitioner is a corporation with its principal office, at              
          the time of the filing of its petition, in Beckley, West                    
          Virginia.  It filed its 1991 and 1992 income tax returns with the           
          Internal Revenue Service, Cincinnati, Ohio, Service Center.                 
               The sole shareholder of petitioner is also the sole                    
          shareholder of Whitlock Realty, Incorporated (Realty).  During              
          the 1991 taxable year, petitioner sold a motor home to Realty for           
          $13,675.34.  The original cost of the motor home was $17,000.  On           
          its 1991 tax return, petitioner deducted the $3,325 difference.             
               During the taxable years 1991 and 1992, petitioner                     
          maintained insurance on the life of its principal officer and               
          shareholder in order to obtain financing for the purchase of                
          automobiles.  Petitioner paid premiums of $16,005 for 1991 and              
          $21,340 for 1992.  Petitioner was also the beneficiary of the               
          policy.  During the years at issue, petitioner received no                  

               1  Unless otherwise indicated, all statutory references are            
          to the Internal Revenue Code in effect for the years in issue,              
          and all Rule references are to the Tax Court Rules of Practice              
          and Procedure.                                                              

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