William Henry Sundel - Page 19

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             Commissioner, T.C. Memo. 1991-93; Bratulich v. Commis-                   
             sioner, T.C. Memo. 1990-600.                                             
                  In this case, petitioner does not address respondent's              
             position that the additional expenditures are subject to                 
             section 280E and are not deductible, nor does petitioner                 
             argue or present any reason to conclude that the additional              
             expenditures should be treated as an exclusion from gross                
             income on account of cost of goods sold.  See Franklin v.                
             Commissioner, T.C. Memo. 1993-184.  We therefore reject                  
             petitioner's contention that the receipts from the Michigan              
             transaction should be reduced by such expenditures.                      
                  Finally, we reject petitioner's assertion that the                  
             proceeds of the marijuana transaction were split three ways              
             rather than two, as determined by respondent.  Petitioner                
             bases this assertion on his own testimony and that of                    
             Mr. Bonalewicz.  However, petitioner admitted during his                 
             plea hearing in the criminal case that he split the                      
             proceeds equally with Mr. Lubiejewski.  Moreover,                        
             Mr. Bonalewicz testified that he had a limited role in the               
             transaction, and that he was present in Michigan for only                
             3 to 4 days after the marijuana arrived there.  Given the                
             nature of his involvement in the transaction, we find that               








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