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FINDINGS OF FACT
Some of the facts have been stipulated, and the stipulation
of facts and attached exhibits are incorporated herein by this
reference.
Petitioners resided in Lind, Washington, at the time of the
filing of their petition. Petitioners timely filed their joint
1991 Federal income tax return with the Internal Revenue Service
Center at Ogden, Utah. Petitioners reported their income using
the cash method of accounting.
During 1991, petitioners engaged in the business of farming.
Specifically, they grew and sold grain. They have been in the
business of farming for over 25 years. In October and November
1991, petitioners entered into deferred payment contracts (the
contracts) with the Union Elevator Warehouse Co. (Union
Elevator). Pursuant to the contracts, title to the grain passed
to Union Elevator at the time of sale. However, petitioners
contracted for payment to occur the following year. One of the
contracts with Union Elevator, which is representative of all the
contracts at issue, provides:
The Seller agrees to sell and Buyer agrees to buy from
Seller the following commodities and both agree to
abide by the terms and conditions listed below:
Quantity: 2,000 BU.
Commodity: Soft white wheat
Price: 4.00
Price basis: FOB whse
Title passes on: 11-22-91
Payment date: Jan 1992
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