- 8 - point did Lakeview institute legal proceedings or otherwise seek to collect on an indebtedness from William. Petitioner consulted with an attorney and accountant in connection with the decision not to seek collection. Also notwithstanding the failure to execute the Release Agreement, Lakeview issued a $75,000 check that was dated December 30, 1992, and made payable to William. William deposited the check on April 1, 1993. The following handwritten legend appears on the back of the check above William's endorsement: RECEIVED AS PAYMENT OWED FOR � INTEREST OF LAND & BUILDING AT 6835 MIDDLEBELT RD GARDEN CITY[.] A Form 1099 reporting income of $75,000 paid to William was issued by Lakeview for 1992, on which the payment was characterized as "Nonemployee compensation". On its 1992 return, Lakeview claimed a $75,000 deduction for "rent". In 1990, when petitioner and William were 50-percent shareholders of Lakeview, Lakeview had purchased automobiles for use by William and petitioner. Lakeview paid $31,878.25 to purchase an automobile for William's use. In connection with that purchase, the car dealer issued a check for $9,000 to Lakeview as payment for a traded-in vehicle, and William deposited the check into his personal account. (...continued) amount of "Nonemployee compensation" reported as paid to William Stark by Lakeview, and the $134,116 figure deducted as the "forgiven" debt on Lakeview's 1992 return.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