- 2 - Docket No. Year Deficiency 16255-97 1993 $35,452 1994 17,053 20939-97 1992 112,339 1993 1,054 1 This amount is based on a $16,046 adjustment to income under the indirect method (the source and application of funds method). In the stipulation of facts, however, respondent and petitioner Steve H. Benavidez (Benavidez) agree that Benavidez failed to report taxable income of $8,646, rather than $16,046, for the 1992 taxable year. These cases have been consolidated for purposes of trial, briefing, and opinion. After concessions by Benavidez,1 the issue for our consideration is whether the transaction between petitioners should be treated as a sale-leaseback or a financing arrangement. FINDINGS OF FACT2 Petitioners Lauro and Gayle Guaderrama (the Guaderramas) and Benavidez resided in Las Cruces, New Mexico, at the time their petitions were filed in these consolidated cases. Prior to 1991, Benavidez owned a restaurant and bar called Steve’s Tavern. Steve’s Tavern burned down in 1989. Steve’s Tavern was insured, and Benavidez received the insurance proceeds approximately 6 to 8 months after the fire. The insurance 1 The parties have stipulated that petitioner Steven H. Benavidez (Benavidez) is not entitled to a deduction for amortization of the cost of his liquor license. 2 The stipulation of facts and exhibits attached thereto are incorporated herein 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