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Quantum Co. Trust, Lonnie D. Crockett, Trustee, docket No. 185-98:
Accuracy-Related Penalty
Year Deficiency Sec. 6662(a)
1993 $10,124 $2,025
David C. and Lois K. Norton, a.k.a. Kim Z. Norton, docket No. 186-
98:
Accuracy-Related Penalty
Year Deficiency Sec. 6662(a)
1993 $123,751 $24,750
The parties now agree that the income reported by Quantum Co.
Trust for 1993 ($28,000) is properly reportable on the Schedule C,
Profit or Loss From Business, of the 1993 Federal income tax return
of David C. and Lois K. Norton (the Nortons). Consequently,
respondent concedes that no deficiency or penalty exists with
respect to Quantum Co. Trust for 1993. Further, the parties
resolved many of their differences giving rise to the deficiency
respondent determined against the Nortons. After giving effect to
concessions by each of the parties, the issues remaining for
decision are: (1) With respect to calculating the profit from
David C. Norton’s (Mr. Norton’s) construction activities conducted
through his sole proprietorship known as Northridge Construction
(Northridge) in 1993, (a) whether Northridge’s gross receipts were
underreported by $86,155, (b) whether Northridge’s 1993 cost of
goods sold is greater than the amount stipulated by the parties,
and (c) whether the Nortons are entitled to a deduction for travel
expenses in an amount greater than allowed by respondent; (2)
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