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In due course, respondent determined the following
adjustments to WAI's taxable income:
Adjustments 1987 1988 1989
Fee participation $142,607 $51,343 --
Commissions -- 10,515 --
Employee benefits 6,472 5,710 $5,505
Interest income (3,230) (6,700) --
Informal claim -- -- --
Total adjustments 148,756 60,328 5,505
Taxable income reported (52,045) (111,556) 79,930
Corrected 96,711 (51,228) 85,435
In computing the above adjustments, respondent rejected the
position of WAI's representatives that WAI's income for 1987
should be reduced by the amount of the advances received from
Weeden. That issue is referred to above as "Informal claim".
Based upon the above adjustments to WAI's taxable
income, respondent determined increases in the younger
Mr. Whelpley's distributable income from WAI of $17,289 in
1987 and $7,644 in 1989, computed as follows:
1987 1989
WAI's corrected income $96,711 $85,435
Distributive share, 12.5% 12,089 10,679
Section 179 deduction (1,231) (1,250)
10,858 9,429
Loss from WAI, per return 6,431 --
Income from WAI, per return -- (1,785)
Adjustment 17,289 7,644
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