- 19 - made for the 3-month period from November 1991 through January 1992. The S/S/S note was revised during July 1992 when the term for repayment was extended from 10 years to 15 years, and the interest rate was reduced from 10 percent to 8 percent. Following the July 1992 revision, no payments were made during the period from September through December 1992. During January 1993, the S/S/S note was again revised, and the interest rate was reduced from 8 percent to 6.5 percent. Information Reported by SPC-FL and the SPC-FL Shareholders SPC-FL deducted the interest it paid to SSI. The interest expense deduction ultimately passed through to the individual SPC-FL shareholders.17 SPC-FL did not issue Forms 1099 to report interest paid to the SPC-FL shareholders. On their respective Federal income tax returns, the SPC-FL shareholders did not report any interest income from SPC-FL and did not claim any interest deductions for amounts paid to SSI for taxable years 1990, 1991, or 1992. On their Federal income tax returns, the Spencers claimed the following losses as Mrs. Spencer's share of losses from SPC-FL: Year Amount of Loss Claimed 1990 $50,812 1991 33,255 1992 55,800 17 Mr. Spencer signed all of SPC-FL's Federal income tax returns for the years in issue in the instant case.Page: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Next
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