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Corp., bought Holiday Isle in a joint venture with Wallace C.
Yost (Yost).
In March 1983, petitioner received a check for $50,000 from
Harris. Petitioner deposited it in his personal checking account
on March 29, 1983. On March 30, 1983, petitioner wrote a $43,250
personal check payable to Dogwood Acres. He did not report the
$50,000 as income or deduct the $43,250 payment to Dogwood
Acres.4
In July 1983, Saudi Corp. paid petitioner $25,000 by
endorsing to petitioner a third-party check payable to Saudi
Corp.
In August 1983, Lakeco Corp. issued common stock to
petitioner as consideration for various services which petitioner
provided to the corporation and to Harris, its principal. Lakeco
Corp.'s sole asset was a parcel of real property in northern
Florida. In March 1984, Lakeco Corp. sold that property and paid
petitioner $62,500 of the proceeds to redeem his stock.5
In 1983, Yost sold his interest in Holiday Isle to Harris,
acting as Saudi Corp. In September 1983, Harris, acting as Saudi
Corp., sold Holiday Isle to an unrelated party. When the Holiday
Isle transaction closed, the closing agent paid a $250,000
4 Petitioner concedes that the $50,000 is income to him.
5 Petitioner did not report the $62,500 as income.
Petitioner concedes that the $62,500 is income to him.
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Last modified: May 25, 2011