- 7 -
there is no indication that the loans were originally made to the
shareholder, and the record does not indicate that the creditor
looked primarily to the shareholder for repayment of the loan.2
Petitioners also argue that they received a $100,000
management fee from A.J. Concrete in 1992 which they did not
actually accept but instead constructively contributed to
Olympic. Olympic’s 1992 return, however, does not support
petitioners’ argument. There is no indication on Olympic’s
return that it received a capital infusion or loan from
petitioners of $100,000. Moreover, A.J. Concrete’s tax returns
do not list any loans to Olympic after March 31, 1992.
Petitioners have simply failed to show that this was the case.
Accordingly, respondent’s determination that petitioners had
insufficient bases in Olympic for 1992 is sustained.
II. Understated Income
Respondent determined that Olympic’s 1992 income was
understated by $56,598 as the result of an error in converting
book income to taxable income. Petitioners did not present any
evidence on this issue and failed to address it in their post-
2 The Court of Appeals for the Eleventh Circuit has also
distinguished its holding in Selfe v. United States, 778 F.2d 769
(11th Cir. 1985). See, e.g., Sleiman v. Commissioner, 187 F.3d
1352 (11th Cir. 1999), affg. T.C. Memo. 1997-530; Spencer v.
Commissioner, 110 T.C. 62, 84-86 (1998), affd. 194 F.3d 1324
(11th Cir. 1999).
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011