A.J. Concrete Pumping, Inc. - Page 17




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          petitioner reported a $227,061 gain from this sale.  The parties            
          agree that petitioner miscalculated the gain from the disposition           
          of the property, and the amount in the notice of deficiency is              
          correct.  Petitioner, however, now contends that Olympic was the            
          true owner of this property, and the gain from the sale of the              
          equipment should be reported by Olympic and not petitioner.                 
               Petitioner’s contention, however, is wholly unsupported in             
          the record.  At trial, Mr. Bone, petitioner’s 51-percent owner,             
          in response to the question of who owned the equipment, replied             
          that petitioner owned it.  Petitioner also failed to present any            
          evidence regarding the agreement between petitioner and Olympic             
          with respect to the equipment under consideration.  Consistent              
          with respondent’s determination and petitioner’s reporting of the           
          transaction is the fact that Olympic’s 1991 and 1992 tax returns            
          included $125,816 and $146,847, respectively, in equipment lease            
          deductions.  Olympic’s reporting of lease payments supports our             
          holding here that the arrangement between petitioner and Olympic            
          was a lease.  Accordingly, respondent’s determination regarding             
          the gain on the sale of equipment is sustained.                             
          Overstatement of Inventory                                                  
               Findings of Fact                                                       
               Petitioner listed its 1991 ending inventory as $30,602.                
          Petitioner listed its 1992 beginning inventory as $91,668.  The             
          difference is attributable to Olympic’s 1992 discontinuation of             






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