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$95,935.20
Loomis Residence Monthly Payment Issue
Each of the two monthly payments that Mr. Palmer received in
January 1995 and the one monthly payment that he received in
February 1995 from Olin Ordnance with respect to his respective
approved monthly invoices 0008, 0009, and 0010 included the $1,700
Loomis residence monthly payment. Petitioners reported in Sched-
ule E as rent with respect to the Loomis residence the total of
those three Loomis residence monthly payments ($5,100).21 Respon-
dent determined in the notice that the $5,100 of Loomis residence
monthly payments that petitioners claimed in Schedule E as rent
with respect to the Loomis residence constitutes self-employment
earnings and not rental income and therefore increased petition-
20Since respondent does not seek an increased deficiency for
1995 attributable to the respective amounts that Olin Ordnance
owed to Mr. Palmer with respect to his approved monthly invoices
0016 through 0020 covering the period from the execution of the
July 1995 amendment until the end of 1995, we need not address
whether Mr. Palmer constructively received during 1995 the
aggregate amount of such compensation. Suffice it to say that
our views with respect to the inefficacy of the July 1995 amend-
ment to preclude application of the constructive-receipt doctrine
to the respective amounts of nonemployee compensation that Olin
Ordnance owed to Mr. Palmer with respect to his approved monthly
invoices 0011 through 0016 covering the period from Feb. 6, 1995,
to the execution of the July 1995 amendment apply with equal
force to the respective amounts of nonemployee compensation that
Olin Ordnance owed to Mr. Palmer with respect to those subsequent
invoices.
21Olin Ordnance reported, inter alia, in Form 1099 the
$5,100 of Loomis residence monthly payments as nonemployee
compensation that it paid to Mr. Palmer during 1995.
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