Bill L. and Patricia M. Spencer - Page 20

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          On their Federal income tax returns, the Schroeders claimed the             
          following losses as their share of losses from SPC-FL:                      
                              Amount of Loss Claimed                                  
               Year    Joseph T. Schroeder   Sheryl S. Schroeder   Total              
               1991      $16,628             $13,302             $29,930              
               1992      28,026              22,420              50,446               
               SPC-FL's corporate returns, Forms 1120S, did not reflect any           
          amount on Schedule L as "loans from shareholders" for taxable               
          years 1990, 1991, or 1992.  The debt incurred by SPC-FL in                  
          purchasing the assets from the SPC-FL shareholders (i.e., the               
          SPC-FL note) was reflected on Schedule L as "mortgages, notes,              
          and bonds payable in 1 year or more."18  SPC-FL's Schedules L,              
          for taxable years 1990, 1991, and 1992, reflected that its                  
          capital stock was $1,000 and that its paid-in capital was $9,000.           











          18   The amounts reflected on SPC-FL's Schedules L as "mortgages,           
          notes, and bonds payable in 1 year or more" are as follows:                 
               Year      Beginning of Tax Year    End of Tax Year                     
               1990      Initial Return           $1,047,927                          
               1991      $1,047,927               1,053,592                           
               1992      1,053,592                1,116,771                           




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