- 12 - the winter 1992 course into the account at World Savings. Rather, he deposited the $30,000 into the Sanwa account and did not transfer any money from Sanwa to World Savings. Consequently, the $30,000 tuition from the winter 1992 guaranteed course was not held in trust in the World Savings account. Petitioner also continued to pay refunds to failing students from the Sanwa account during 1990 and 1991. He did not withdraw money from the account when students passed the bar examination and, under his argument, he would have been entitled to the tuition. In fact, petitioner did not make any withdrawals from the World Savings account until 1994. Petitioner’s actions in connection with the World Savings account and his treatment of the tuition are entirely inconsistent with his claim that he held the tuition payments in trust at World Savings. He did not place the $30,000 of guaranteed tuition in an escrow or trust account. Rather, he placed all of the tuition into the Sanwa account and spent the tuition to pay operating expenses of the review courses. We hold that petitioner had actual receipt of the money upon deposit. Accordingly, petitioner must report the tuition as income in 1991. Petitioner contends that before 1990, he reported the tuition from the guaranteed course as Schedule C gross receipts in the year the tuition was paid by the students. Petitioner maintains that in 1990, he opened a trust account at WorldPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
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