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pertinent part:
1.A.1. It is determined that the deductions shown on
your schedule C [for Villa Del Mar] for the
taxable years ending 1992, 1993, 1994 and 1995,
in the respective amounts of $144,630.00,
$85,500.00, $14,000.00 and $100,000.00 are
disallowed, since it has not been established
that these amounts were ordinary and necessary
business expenses or were expended for the
purpose designated. See the figures below.[2]
Accordingly, your 1992, 1993, 1994 and 1995
taxable incomes are increased $144,630.00,
$85,500.00, $14,000.00 and $100,000.00,
respectively.
Expenses 12-31-92 12-31-93 12-31-94 12-31-95
Legal $65,750 $52,500 -- $100,000
Taxes 18,000 18,000 2,000 --
Wages 48,880 -- -- --
Security 12,000 12,000 12,000 --
Total $144,630 $85,500[3] $14,000 $100,000
1.A.2. It is determined that the loss shown on your
1992 return in the amount of $28,589.00 from the
small business corporation known as Amazona
Enterprises, is disallowed in full. See Exhibit
A for details. Accordingly, your 1992 taxable
income is increased $28,589.00.
1.A.3. It is determined that the losses shown on your
1992 and 1994 returns in the respective amounts
of $5,000.00 and $3,558.00, from the partnership
known as Roadway [sic] Leasing are disallowed,
since it has not been established that there
were any ordinary and necessary business
expenses paid or incurred or that any
partnership returns have been filed.
2As indicated previously, respondent did not challenge
certain other Villa del Mar business deductions petitioner had
claimed for the years in issue.
3The notice of deficiency states expenses for the year
ending Dec. 31, 1993, total $85,500. We note that the correct
total is $82,500.
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