- 8 -
Petitioners’ Income as Determined by Respondent for 1992
For the tax year 1992, respondent, using the source and
application of funds method, determined that petitioners had
unreported income. To make his determination, respondent used
the following information:
Source of funds:
Adjusted gross income $26,805
Loan balance 12/31/92 56,894
Bank account balances 1/1/92 284
Moneys advanced from daughter 1,000
Depreciation (noncash deduction) 4,329
Basis in asset sold 20,656
Cash on hand 1/1/92 3,000
Total sources available 112,968
Application of funds:
Personal living expenses $24,093
Loan balance 1/1/92 100,000
Funds to construct house for daughter 4,697
Bank balance 12/31/92 1,667
Increase in inventory 5,000
Increase to capital/Glenwood 6,136
Cash on hand 12/31/92 3,000
Total application of funds 144,593
Total sources available 112,968
Understatement of income 31,625
Additional proceeds from sale of
Glenwood (2,930)
Sale of equipment (6,000)
Understatement of income 22,695
Petitioners’ Income as Determined by Respondent for 1993
For the tax year 1993, respondent, using the source and
application of funds method, determined that petitioners had
unreported income. To make his determination, respondent used
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