Robert E. Iles and Monica M. Iles - Page 37

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               On their 1982 tax return, petitioners reported (1) $121,918            
          gross income and $106,416 net profit from Robert's role as trust            
          manager (presumably from Riago Trust), (2) $7,899 gross income              
          and $154 net profit from Maximum Management, (3) $178,658 as                
          grantor trust loss from Riago Trust, (4) $61,923 long-term                  
          capital gain from the sale of SSC, and (5) a $3,589 short-term              
          capital gain pass-through from Riago Trust.  Supra N. Second Sale           
          of Interest in Structured Shelters of Cincinnati.  Petitioners              
          reported their total tax liability as $3,029, all from self-                
          employment tax.                                                             
               4.  Structured Shelters' and Riago Trust's 1981                        
               and 1982 Tax Returns                                                   
               On its tax return for its fiscal year ended July 31, 1981,             
          filed on April 6, 1982, SSI reported gross income of only $8,347            
          and undistributed taxable income as a loss of $353,185.56.  This            
          tax return was signed by Monica.  Petitioners did not report any            
          pass-through income or loss from SSI on their tax return for                
          1981.  SSI did not file a tax return for its fiscal year ending             
          July 31, 1982.                                                              
               Fiduciary tax returns for the Riago Trust for 1981 and 1982            
          were filed on September 10, 1988, several months after                      
          petitioners filed their 1981 and 1982 tax returns.  The Riago               
          Trust's tax returns for these years treated the Riago Trust as a            
          grantor trust, with Robert as the grantor.  Petitioners' 1981 and           
          1982 tax returns include flow-through income and losses from the            





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