- 31 -
Management fees -0- -0- -0- -0-
Depreciation 23,520.0023,520.0023,520.00 -0-
Total expenses 98,182.6664,457.6093,174.20 (28,716.60)
Loss from rental activity(39,185.66)(5,460.60)(34,177.20)
Notice ofPetitioner'sRespondent's
Allocation of Expenses for 1993 DeficiencyAllocation
Allocation Difference
Rental receipts $42,775.00$42,775.00$42,775.00-0-
Capital gain, installment sales11,279.0011,279.0011,279.00 -0-
Income from rental activity54,054.0054,054.0054,054.00 -0-
Officer compensation39,750.0014,906.2539,750.00 ($24,843.75)
Auto expense 1,456.00546.00 1,456.00 (910.00)
Insurance 1,913.001,913.00 1,913.00 -0-
Interest 3,964.003,964.00 3,964.00 -0-
Labor 6,698.006,698.00 6,698.00 -0-
Legal and accounting1,500.00480.60 480.60 -0-
Miscellaneous 1,321.00423.25 1,321.00 (897.75)
Repairs and maintenance826.00 826.00 826.00 -0-
Supplies 171.00 54.79 171.00 (116.21)
Taxes
Payroll 3,162.731,186.02 3,162.73 (1,976.71)
Real estate 4,996.784,996.78 4,996.78 -0-
Franchise/Income 6,381.902,044.76 2,044.76 -0-
Utilities and telephone517.00 165.65 517.00 (351.35)
Yard work and mowing2,848.002,848.00 2,848.00 -0-
Management fees 4,100.001,313.64 4,100.00 (2,786.36)
Depreciation 25,868.0028,520.0025,868.00 2,652.00
Total expenses 105,473.4170,886.74100,116.87(29,230.13)
Loss from rental activity(51,419.41)(16,832.74)(46,062.87)
Petitioner argues that its expenses for officer
compensation, automobile, and payroll taxes which relate
entirely to Mr. McKelvey's employment should be allocated
between petitioner's rental and sales activities in
accordance with Mr. McKelvey's testimony that he spent an
average of 25 hours per week or 62.5 percent of his time
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