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for accrued tax expenses where petitioner otherwise uses the cash
method of reporting.
Background
This case was submitted fully stipulated under Rule 122.1
The stipulation of facts is incorporated herein and found
accordingly.
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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