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FINDINGS OF FACT3
At the time the petition was filed, petitioners resided in
Little Rock, Arkansas. During the years in issue, Steven R.
Williams (petitioner) was the president and sole shareholder of
Maverick Transportation, Inc. (MTI). MTI is a trucking company,
and petitioner has more than 20 years of experience in the
trucking industry.
MTI was founded in 1980 and operated as a subchapter C
corporation for a number of years. On July 1, 1988, MTI elected
to be taxed as an S corporation. During the time that MTI was a
C corporation, MTI had accumulated in excess of $264,078 of
earnings and profits that were carried forward to 1990.
During 1990, MTI made distributions to its sole shareholder
(petitioner) in the amount of $323,399. Also, for the 1990
taxable year, MTI had a "nonseparately"4 computed ordinary loss
of $217,341. MTI's Accumulated Adjustments Account (AAA), at the
beginning of the 1990 tax year, had a $349,256 balance. Items of
income, loss, and deductions that resulted in positive or
negative5 adjustments to MTI's AAA during the 1990 tax year,
including the distributions to petitioner and net ordinary loss,
were as follows:
3 The stipulation of facts and the attached exhibits are
incorporated by this reference.
4 This is a term used in sec. 1367. See infra note 7, which
contains the pertinent part of that section.
5 Negative adjustments are in parentheses.
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