Joseph A. and Carol DelVecchio - Page 10




                                       - 10 -                                         

          Sales Tax Deficiencies                                                      
               Monterey was subject to an examination by the State of                 
          Florida Department of Revenue (the Department) for sales tax                
          liabilities for 1987, 1988, and other years.  The Department                
          found that Monterey had collected more sales taxes than reported            
          to the Department.  For 1987 and 1988, Monterey reported to the             
          Department gross receipts of $288,276 and $124,763, respectively.           


                                       OPINION                                        
          I.  Deficiencies in Tax                                                     
               Respondent determined deficiencies in petitioners’ income              
          taxes for 1987 and 1988 principally on account of respondent’s              
          determination that petitioners underreported their Schedule C               
          income from Monterey by $75,859 and $44,347, for 1987 and 1988,             
          respectively.1  On the Forms 1040X, petitioners reported                    
          increased Schedule C net income for Monterey of $80,214 and                 
          $54,778, for 1987 and 1988, respectively, a capital gain of                 
          $27,944 for 1988, net operating loss deductions of $74,749 and              
          $85,000 for 1987 and 1988, respectively, and decreases in                   
          interest income of $747 and $288, for 1987 and 1988,                        



               1  Respondent also determined increased self-employment                
          taxes under sec. 1401.  Petitioners have not separately                     
          challenged those determinations, which, we assume, are derivative           
          of respondent’s principal adjustments.  We do not further discuss           
          the self-employment tax adjustments.                                        





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011