- 6 -
Reporting Sale of Alhambra Property
On its U.S. Corporation Income Tax Return, Form 1120, for tax
year ended February 28, 1991, filed on March 5, 1993, Jaussaud
Enterprises reported a capital gain of $194,7053 from the sale of
the Alhambra property. Jaussaud Enterprises also reported gross
receipts of $1,210, which resulted in a reported Federal income tax
liability of $49,683 for the tax year ended February 28, 1991,
which was not paid. The return was signed by petitioner, as
corporate president.
Petitioner did not report any gain from the sale of the
Alhambra property on his U.S. Individual Income Tax Return, Form
1040, for any year.
Promissory Note
At an undisclosed time following the sale of the Alhambra
property, petitioner sought professional advice with respect to the
tax consequences of Jaussaud Enterprises' transfer of the Alhambra
property to him and the subsequent sale of that property. On July
15, 1993, petitioner, as president of Jaussaud Enterprises, called
a special meeting of the board of directors (which consisted solely
of himself) and determined that he owed the corporation $125,000.
(The record is void of any explanation as to how the amount of
petitioner's debt to Jaussaud Enterprises was determined to be
3 The gain on the sale of the Alhambra property was
calculated as follows: $329,000 (gross proceeds) + $28,130
(depreciation previously allowed) - $162,425 (basis) = $194,705.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011