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entire $484,080 basis in their Burien Nissan shares against the
proceeds that they reported on their second amended 1990 return.
Burien Nissan Amended Income Tax Returns
On March 4, 1998, Burien Nissan mailed Amended U.S.
Corporate Income Tax Returns (Forms 1120X) for taxable years
1989, 1990, 1991, 1992, 1993, 1994, 1995, and 1996 to the Ogden
Service Center. The Form 1120X for 1994 reflected a $74,468
increase in Burien Nissan’s reported loss for the year. The
increased loss was due to the following reported adjustments:
Johnston Reverse Total
Accrue Family EmploymentTax Year
AdditionalPartnership EmploymentAward Prior Adjustment
Ransopher Interest Sec. 267 Award Amortization Expense/
Year Interest AdjustmentAdjustmentAdjustmentExpenses (income)
1989 -- $1,731 -- -- -- $1,731
1990 -- (65) -- -- -- (65)
1991 -- 9,045 $(1,438) -- -- 7,607
1992 -- 4,457 (2,497) -- -- 1,960
1993 -- 5,917 29,736 -- -- 35,653
1994 $10,000 -- 11,483 $9,783 $(3,684) 27,582
Total 10,000 21,085 37,284 9,783 (3,684) 74,468
Sale of Aurora Mitsubishi Assets
Mr. Johnston owned 75 percent of the outstanding stock of
Don Johnston, Inc. Mr. McLaughlin and Richard Huntoon owned 5
percent and 20 percent, respectively, of the outstanding stock of
Don Johnston, Inc. Don Johnston, Inc., owned and operated a car
dealership doing business as “Aurora Mitsubishi” from 1989 until
the sale of the dealership.
On October 28, 1994, Matthew B. West, Inc., and Don
Johnston, Inc., entered into an agreement entitled “Agreement for
Sale of Assets” (aurora asset sale agreement). Mr. Johnston
signed the aurora asset sale agreement as president of Don
Johnston, Inc.
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