-50-
$983,104; the ending balance was $987,027. The total asset value
was composed of the following assets, and their reported
beginning and ending values: Cash, $886 and $439; other current
assets, $414,701 and $11,374; loans to shareholders, $483,144 and
$928,420; real estate loans, $70,511 and $46,794; and buildings
and other depreciable assets, $13,847 and zero.
The gross receipts and ending balances in the accounts in
the fiscal years ending September 30, 1991 through 1995, are as
follows:
1991 1992 1993 1994 1995
Gross Receipts -0- -0- -0- -0- -0-
Other income 3$57,849 -0- 4$481 $165,073 4$1,515
Total assets $981,329 $977,744 $970,932 $945,531 $918,583
Cash $127 -0- -0- -0- -0-
Other current assets 1 -0- -0- $1,683 -0- $5,302
Real estate loans -0- -0- -0- -0- -0-
Other investments 2 -0- $23,718 $23,718 -0- -0-
Loans to shareholder $981,202 $954,026 $945,531 $945,531 $913,281
Shareholder loan 99.99 97.57 97.38 100.00 99.42
account percentage
1 Asset account for tax refunds receivable.
2 The "other investments" account reflected petitioner's
contribution of the one-half interest in the lot on Spalding
Drive to INI that the corporation had earlier distributed to
petitioners, and that had been recorded as a $23,718 increase to
the loan account. Petitioner agreed to contribute this property
to INI after a meeting with respondent's agent, Carolyn Hill,
about a tax liability from a prior year in which Spalding and INI
filed a consolidated return. Petitioner treated the contribution
as a $23,718 loan payment. We have found that the earlier
distribution of the property to petitioner was not a loan.
Consistent with that finding, we hold that petitioner's return of
the property to the corporation was a contribution to capital.
The lot was sold in 1994 to pay the tax liability from the
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