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during 1992. Amazona reported its taxable income on a cash
method of accounting.
On an amended 1992 return, Amazona reported an ordinary loss
of $48,579. This loss resulted from payments by Amazona during
1992 for entertainment fees of $47,000, legal fees of $794,
travel expenses of $743, and meals and entertainment expenses of
$42.
On his 1992 return, petitioner (as 100-percent shareholder
of Amazona) claimed a "nonpassive loss" of $28,589 from Amazona.
His return reflected Amazona to have had an ordinary loss of
$48,579 for 1992, but further stated that only $28,589 of that
loss was allowable to him for 1992 after application of the at
risk provisions of section 465.
Roadmaster Leasing
In 1992, petitioner met with Lyle Schole, the promoter of a
proposed venture called Roadmaster Leasing. They discussed
entering into a limited partnership engaged in the business of
buying late-model, used automobiles in the United States to
resell in Latin America. Petitioner further met and discussed
the proposed venture with Jose Candelario, an accountant Mr.
Schole had retained to perform tax work for Roadmaster Leasing.
Petitioner agreed to invest and purchase a partnership unit
in Roadmaster Leasing for $25,000. On September 21, 1992,
petitioner paid $5,000 to Mr. Schole as a downpayment on his
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