Friscia Construction, Incorporated, et al. - Page 10




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          the Friscias made $24,449 in nontaxable transfers into this                 
          account.3                                                                   
               The record reflects that the Friscias made additional                  
          nontaxable deposits into the 522 account of $4,889, which were              
          Amway sales proceeds received by the Friscias in 1993.  These               
          proceeds are properly allocable to the Friscias’ 1993 return.               
          See Lavery v. Commissioner, 158 F.2d 859 (7th Cir. 1946)                    
          (payments made by check to a cash basis taxpayer are includable             
          in income in the year the check is received, not the year it is             
          deposited), affg. 5 T.C. 1283 (1945).                                       
               The Friscias also claim that $4,002 of the payments received           
          from Friscia Construction in 1994 and deposited into the 522                
          account were reimbursements for expenditures paid by the Friscias           
          on behalf of the company.  These include a $1,500 reimbursement             
          for a Christmas party and a $2,502 reimbursement for a computer.            
          The Friscias have failed to establish that these expenses were              
          incurred on the company’s behalf.  Thus, these amounts are                  
          includable in the Friscias’ income for 1994.                                
               Accordingly, $24,178 of the deposits in the 522 account                
          represents income taxable to the Friscias in 1994.                          




               3Petitioners claim an additional nontaxable transfer in the            
          amount of $1,325 from “account 6930".  This contention is                   
          unsupported as there is no document in the record reflecting an             
          account 6930.                                                               





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