- 2 - the amount of debt for which they and the corporation were the primary obligors. FINDINGS OF FACT1 Petitioners Abdul and Rawnaq Hafiz are husband and wife and timely filed joint Federal income tax returns for the years 1989 and 1990. Petitioners resided in North Jackson, Ohio, at the time they filed their petition in this case. In the late 1970's, petitioner Abdul Hafiz (Mr. Hafiz) entered into a partnership to invest in the motel business. The partnership owned and operated a Days Inn in Monroe, Ohio. In 1984, the partnership began experiencing severe financial difficulties. Mr. Hafiz decided to purchase the motel from the partnership in the hopes of turning it into a profitable enterprise. In 1985, Mr. Hafiz decided to form Family Motels, Inc. (Family Motels), a corporation that elected to be treated as a "small business corporation" under subchapter S. Mr. Hafiz was a 90-percent shareholder of Family Motels, and his family members held the remaining shares. Family Motels was organized to acquire and manage motels. At the time of incorporation, it was necessary to borrow funds to purchase the Days Inn in Monroe. Mr. Hafiz met with 1 The stipulation of facts and the attached exhibits are incorporated by this reference.Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011