Melvin R. Sweatman - Page 3

                                        - 3 -                                         
          The Ranch                                                                   
               Petitioner and a friend, William Anderson (Anderson),                  
          planned to acquire Las Colinas Ranch (the Ranch), in Westhoff,              
          Texas, in order to operate a parimutuel horse-betting business.             
          Anderson owned a corporation called Shoreline Resources, Inc.,              
          which acquired the Ranch.  When Shoreline Resources acquired it,            
          the Ranch consisted of 133 acres of land and an old, run-down               
          frame house.  Anderson paid to build the exterior shell of a                
          ranch house on the land, but did not pay to complete the                    
          interior.  Petitioner paid to complete the interior of the ranch            
          house, paid for some repairs to the frame house, and paid for               
          other improvements on the property.  Shoreline Resources merged             
          with Paz in December 1988, and Paz was the corporation that                 
          survived the merger, with petitioner as president and 78-percent            
          shareholder and Anderson as 22-percent shareholder.  As a result            
          of the merger, Paz became the owner of the Ranch, with book                 
          values of $115,007 for the land and $39,000 for the ranch house.            
          Petitioner moved to the ranch house after he left Tejas Gas                 
          Corporation in 1989 or 1990, and it was petitioner's primary                
          residence from July 1990 to April 1991.                                     
          The Transfer of the Ranch                                                   
               Petitioner and Paz employed the accounting firm of Davidson,           
          Eagleson & Co (Davidson, Eagleson).  John Eagleson (Eagleson), a            
          partner with Davidson, Eagleson, was an officer and director of             
          Paz.  Davidson, Eagleson prepared tax returns for both petitioner           




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  Next

Last modified: May 25, 2011