Christopher K. and Brenda M. Cox, et al. - Page 6




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          United States Individual Income Tax Return, for 1994.  Because              
          each petitioner shareholder was unable to utilize fully his or              
          her pro rata share of Cox Tomato’s 1994 loss, each petitioner               
          shareholder filed a Form 1045, Application for Tentative Refund,            
          which reported a net operating loss (NOL) for 1994 and carried              
          that NOL back to prior taxable years.  Christopher carried his              
          NOL back to 1991 and 1992, Gregory carried his NOL back to 1992             
          only, and Deborah carried her NOL back to 1991, 1992, and 1993.             
               In 1995, Cox Tomato had an operating loss of $193,825.                 
          Deborah reported $12,000 of that loss on the Schedule E to her              
          1995 Form 1040.                                                             
          II. Loans                                                                   
               A.   Loan 91850 for $220,000                                           
               On April 7, 1989, Christopher and Brenda purchased improved            
          real estate located at 222 East Sheridan in Oklahoma City,                  
          Oklahoma, and gave a mortgage on the property (first mortgage) to           
          the seller.  Christopher subsequently leased the property to Cox            
          Tomato for use as a corporate office and warehouse (the                     
          warehouse).                                                                 
               With respect to the warehouse, Christopher reported rents              
          received, mortgage and other interest paid, and expenses for                
          repairs paid, on his Schedules E to his 1991, 1992, and 1994                
          Forms 1040.  Neither Gregory nor Deborah received any income or             








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