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her husband. The Mark Hancock Corp. developed several
subdivisions during the 1980's and 1990's.
In February 1986, Hancock Enterprises deeded two lots in the
Playa del Sur subdivision to petitioner, which she immediately
sold to Mark Hancock. He paid $104,270 for the two lots. The
Mark Hancock Corp. built houses on those lots at a date not
specified in the record.
2. Greg Hancock Corp.
Greg Hancock Corp. developed subdivisions with about 80 lots
in 1986, 220 lots in 1987, and about 68 lots in 1988.
F. Petitioner's Tax Returns
Hancock Enterprises treated the 48 lots it held when it was
liquidated as inventory on its books.
Petitioner reported the amounts realized from the sale of
lots in 1987 as gross receipts on a Schedule C attached to the
trust's 1987 tax return. She treated her adjusted basis as the
cost of goods sold and deducted several other expenses.
Petitioner reported sales of lots as sales of inventory on
the Schedules C attached to her returns for 1989 to 1996. She
reported the amounts she realized from those sales as gross
receipts and her adjusted basis as cost of goods sold, and she
deducted several other expenses.
Petitioner reported on Schedules C for 1987 and 1989-96 that
she was in the real estate development business.
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