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Penalty
TYE Deficiency Sec. 6662(a)
Mar. 31, 1992 $201,698 $40,340
Mar. 31, 1994 59,524 11,905
After concessions,2 the issues remaining for our
consideration are: (1) Whether petitioner understated its 1992
and 1993 gross receipts by $56,787 and $74,046,3 respectively;
(2) whether petitioner had unreported equipment rental income
from Olympic Concrete Pumping, Inc. (Olympic), in 1992 of
$62,789; (3) whether petitioner had installment sale gains in
1993 and 1994 of $31,500 and $53,602, respectively, from the
disposition of equipment that purportedly had been leased; (4)
whether petitioner had unreported income in 1992 of $88,893 from
an equipment sale arranged by Olympic; (5) whether petitioner
overstated its beginning inventory for 1992 by $61,066; (6)
2 The parties agree that for the Mar. 31, 1992, tax year:
(1) Petitioner is entitled to an additional $57,182 depreciation
allowance; (2) petitioner is not entitled to deduct the $3,748
interest disallowed; and (3) petitioner is not entitled to deduct
the $10,247 tax expense disallowed. The parties agree that for
the Mar. 31, 1993, tax year: (1) Petitioner is not entitled to
deduct the $12,256 bad debt expense disallowed; (2) petitioner is
not entitled to deduct the $39,110 depreciation expense
disallowed; and (3) petitioner is not entitled to deduct the
$3,748 interest expense disallowed. The parties agree that for
the Mar. 31, 1994, tax year petitioner is entitled to an
additional $65,340 depreciation allowance.
3 The 1993 tax year in which a loss was reported was not the
subject of a deficiency determination. Instead, respondent
adjusted various items that had the effect of reducing the net
operating loss carryover to the 1994 year. One of those
adjustments was based on the bank deposits analysis resulting in
the determination of the $74,046 increase to gross receipts.
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