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All section references are to the Internal Revenue Code in
effect for the years in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure, unless otherwise
indicated.
FINDINGS OF FACT
Some of the facts are stipulated and are so found. We
incorporate by reference the stipulation of facts, the three
supplemental stipulations of facts, and attached exhibits.
Petitioners are husband and wife, who resided in Hammond,
Indiana, when the petition in this case was filed. Petitioner
Nick Kikalos (Nick) was born in Greece in 1935 and came to the
United States in 1936. He completed school through the eighth
grade. Since 1971, Nick has operated Nick's Liquors, a
cigarette, beer, and liquor store business, as a sole
proprietorship. During the years in issue, Nick's Liquors
operated in three separate store locations in Hammond: 4702
Calumet Avenue (store No. 1), 5705 Hohman Avenue (store No. 2),
and 6914 Indianapolis Boulevard (store No. 3). All three stores
had storage areas, and two of them had warehouse facilities.
A. Petitioners' Gross Profit Margins
Nick maintained his office at store No. 1, and his wife,
Helen Kikalos (Helen), worked there for several hours each
1(...continued)
depreciation expenses of $39,301, $38,581, and $33,514 for the
respective years in issue; and the disallowance of a loss of
$9,707 on the sale of a rental house.
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