Ted and Tammy Estes - Page 7




                                        - 7 -                                         
          Court by petitioners with their motion for costs–-lists the                 
          following basis for settlement of the case:2                                
                                             1992       1993      1994                
               Advertising expense           $14,725       -0-       -0-              
               Aircraft expense              -0-        -0-   ($14,186)               
               Commission expense            -0-    ($31,000)     -0-                 
               Cost of goods sold            -0-      (2,204)     -0-                 
               Depreciation expense          (471)      (902)    (832)                
               Gross receipts                (16,808)     5,113  (200,250)            
               Insurance expense             -0-      (2,497)   (1,868)               
               Interest income               228      524        -0-                  
               Misc/other expense            (2,624)    (2,704)   (3,444)             
               Net operating loss deduction    -0-      18,775    28,789              
               Reclassification items        (4,553)   (17,062)   (9,588)             
               Sale of oil royalties         -0-       3,048      -0-                 
               Taxes/licenses expense        (2,228)    (1,299)   (3,463)             
               Travel expense           (1,938)    (4,882)   (1,813)                  
               Truck expense                 (6,960)      -0-       -0-               
               Utilities/phone expense       (4,778)    (4,587)   (5,012)             
               Self-employment tax deduction     688       -0-       -0-              
               Capital gains and losses      -0-       2,460    (3,000)               
               Taxable Social Security       -0-        -0-       -0-                 
               Deduction for exemptions       -0-        -0-       -0-                
               Total adjustments             (24,719)   (37,217) (214,667)            
               Taxable income on return      (18,756)   (39,689)  (44,427)            
               Taxable income as adjusted    (43,475)   (76,906) (259,094)            
          A motion by petitioners to vacate the decision was filed on June            
          14, 1999, and was subsequently granted.  A motion by petitioners            
          for litigation and administrative costs was filed on June 17,               
          1999.                                                                       




          2  The settlement adjustments seemingly do not accurately                   
          reflect the adjustments agreed to by the parties, as reflected              
          elsewhere in the record.  The reasons for these discrepancies are           
          unclear.  The sole issue before the Court, however, is the                  
          appropriate ruling on petitioners’ motion for litigation and                
          administrative costs.                                                       





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