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Background
Petitioner Ronald D. Blush (hereinafter petitioner) started
his business as an independent building contractor in the spring
of 1991. Previously, petitioner had worked as a maintenance
director for the Potomac Conference Corp. (hereinafter Potomac).
Petitioner suffered an on-the-job injury in 1986 while working
for Potomac. Petitioner received $15,076.97 and $5,000 in 1990
and 1993, respectively, as a settlement of his worker's
compensation claim.
Petitioners purchased land in Shenandoah County, Virginia,
in 1983 for approximately $30,000. The property consisted of
five lots, all of which were sold by petitioners during the years
1985 through 1988 for a total of $73,500. Petitioners received
approximately $33,739 of these funds after satisfaction of the
sole mortgage on the property. Petitioners deposited the funds
directly into their bank account.
For the tax years in question, petitioners maintained four
bank accounts--a joint checking account, a business checking
account in the name of petitioner, a savings account in the name
of petitioner, and a checking account in the name of petitioner
Shirley A. Blush. Petitioners deposited $93,452 and $72,808 into
their various bank accounts during 1993 and 1994, respectively.
Petitioners timely filed their 1993 and 1994 Federal income
tax returns. Petitioners attached Schedules C, Profit or Loss
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Last modified: May 25, 2011