- 13 -
and (2) the shareholder's adjusted basis in the corporation's
indebtedness to the shareholder. See sec. 1366(d)(1).
Disallowed losses carry forward to the succeeding taxable year.
See sec. 1366(d)(2).
At trial, petitioner computed her bases in Special O in the
amounts of $5,180, $7,714, and $11,656 for the 1991, 1992, and
1993 tax years, respectively. After trial, petitioner computed
her bases in Special O in the amounts of $10,226, $10,715, and
$14,504 for the 1991, 1992, and 1993 tax years, respectively.
Although petitioner submitted copies of promissory notes to
substantiate her claimed loans to Special O, we are not satisfied
that all of Special O's distributions have been accounted for or
that petitioner's records adequately reflect petitioner's bases
in Special O. Neither petitioner nor Special O kept written
records which reflected petitioner's bases for the years at
issue; i.e., a record which established petitioner's
contributions to Special O and any distributions made by Special
O to petitioner for the years in issue. Another difficulty this
Court has in reconstructing petitioner's bases in Special O is
that funds for both Special Occasions and Special O were
commingled in a single checking account, and several of
petitioner's credit card accounts were apparently used on behalf
of Special O with petitioner's other partners signing
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011