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only being payable on July 1, 1988, and each July 1
thereafter until July 1, 1993, when the entire
principal balance together with accrued interest shall
be due and payable.
Notwithstanding that it was executed on February 14, 1989, the
purchase agreement recites that it was made and entered into as
of November 1, 1987.
In 1990, 1991, and 1992, petitioners received payments from
Chef-Reddy (the Chef-Reddy payments) in the amounts of $283,874,
$165,956, and $64,719, respectively, which payments petitioners
did not report on their income tax returns for those years.
Respondent determined deficiencies in petitioners' Federal
income taxes for 1990, 1991, and 1992 on the grounds, in part,
that the Chef-Reddy payments were items of gross income
improperly omitted from gross income by petitioners.
Petitioners contend that the Chef-Reddy payments are not
items of gross income because they represent a return of capital;
i.e., the Chef-Reddy payments represent amounts that, previously,
should have been taken into income.Discussion1
1 Rule 151(e) deals with the form and content of briefs, and
provides as follows:
(e) Form and Content: All briefs shall contain
the following in the order indicated:
(1) On the first page, a table of contents with
page references, followed by a list of all citations
arranged alphabetically as to cited cases and stating
the pages in the brief at which cited. Citations shall
be in italics when printed and underscored when
typewritten.
(2) A statement of the nature of the controversy,
(continued...)
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