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1989, petitioner sold 13 trucks for $187,661. Twelve of the
thirteen trucks sold in 1989 had beds. Petitioner’s basis in the
13 trucks sold in 1989 was $174,977. Petitioner’s 1989 tax
return, however, reflected the sale of only 9 trucks. In 1990,
petitioner sold two unbedded trucks for $21,818. Petitioner’s
basis in the two trucks sold in 1990 was $20,458. Petitioner’s
1990 tax return, however, did not report any truck sales.
Respondent verified the unreported truck sales by personal
contact with the parties who purchased the trucks.
Sipsey Harbor
In 1986, petitioner purchased real property located on the
Sipsey River in Winston County, Alabama (Sipsey Harbor). Sipsey
Harbor consisted of 41 lots. On August 28, 1988, petitioner
issued an undated warranty deed for Sipsey Harbor to Ann M.
Burdick and Tarrie H. Hyche. Tarrie Hyche paid off his debt to
petitioner in 1991.
Petitioner was the grantor on deeds to two Sipsey Harbor
lots, which were recorded in the Winston County property records
in 1989, and was the grantor on deeds to four Sipsey Harbor lots,
which were recorded in 1990. On petitioner’s financial
statements dated July 27, 1989 and July 31, 1989, petitioner
represented himself as the owner of 30 Sipsey Harbor lots worth
$450,000.
On April 17, 1990, petitioner executed a real estate
mortgage with respect to Sipsey Harbor, which covered all but six
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