- 7 - T.C. 731, 743 (1985); Sherrer v. Commissioner, T.C. Memo. 1999- 122. For 1993, 1994, and 1995, IRS Publication 1136, Statistics of Income Bulletin, reflected the following average net profit margin for roofing contractors: Average Net Profit Year Margin 1993 20% 1994 25% 1995 18% As indicated, respondent’s tax deficiencies against petitioner are based on deposits to the checking account with no allowance for labor and material costs which obviously were incurred in the roofing business. We conclude that for each year it is appropriate to apply to the checking account deposits that are specifically identifiable as gross receipts of the roofing business (namely, those deposits that represent the checks received from Roof Technologies and Vaughn Roofing) the average net profit margin established by respondent for roofing contractors and to allow estimated business expense deductions for the business expenses so calculated. Petitioner has presented no evidence as to how income from the roofing business should be divided between himself and Rebecca and Richard Adair. We conclude that one-half of thePage: Previous 1 2 3 4 5 6 7 8 9 10 Next
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