Edwin A. Helwig - Page 2

                                        - 2 -                                          

                         Year                      Amount                              
                         1990                 $57,405                                  
                         1991                      178,902                             
                         1992                      132,150                             
                         1993                      142,110                             
          The amounts remaining in controversy, in great part, derive from             
          questions about whether petitioner’s S corporation’s claimed                 
          deductions for losses and interest are allowable.  In particular,            
          the controversy involves whether advances from the S corporation             
          to a second corporation constitute debt or equity.  If the                   
          advances are held to be debt, then we must decide whether it was             
          business debt and whether it became worthless as claimed.  We                
          also decide whether petitioner is entitled to deduct interest                
          paid on indebtedness incurred to purchase a yacht.                           
                                   FINDINGS OF FACT2                                   
               Petitioner resided and/or conducted business in the State of            
          California, at the time his petition was filed.  During the years            
          in issue, petitioner was the sole shareholder of K&H Finishing,              
          Inc. (K&H), an S corporation.  In 1966, K&H began providing                  
          painting services to computer manufacturers in the Silicon                   
          Valley, California, area.  As the business matured and through               
          the years before the Court, K&H would purchase and inventory                 
          parts, assemble and finish them, and then sell and deliver them              
          to the manufacturer/customer.  Although K&H did not place the                

               2  The parties’ stipulations of facts and exhibits are                  
          incorporated by this reference.                                              

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011