- 5 -
Revenue and Taxation, Division of Motor Vehicles (DMV) an
“Owner’s/Rebuilder’s Affidavit”, certifying, among other things,
the fair market value of each rebuilt vehicle, as estimated in
the National Automobile Dealers Association (NADA) Official Used
Car Guide (blue book).3 Four of these affidavits were filed in
1995. On these affidavits, Samuel certified NADA estimated fair
market values for four of the rebuilt vehicles in amounts
totaling $32,100.4
Petitioners’ Federal Income Tax Returns
Carol prepared petitioners’ 1994 and 1995 joint Federal
income tax returns. On the Schedule C, Profit or Loss From
Business (Sole Proprietorship) (Schedule C), attached to their
1994 return, petitioners reported that Columbia had $500 gross
receipts and zero cost of goods, showing no opening inventory, no
purchases, and no ending inventory. For 1994, petitioners
reported that Columbia had a net loss of $3,486.
On the Schedule C attached to their 1995 return, petitioners
reported that Columbia had $20,852 in gross receipts, cost of
3 Petitioners did not have a car dealer’s license. In order
to sell the six rebuilt vehicles, Columbia North East Used Parts
(Columbia) first transferred title to petitioners’ son, Monty
Seawright (Monty), for no consideration. Monty then made
application for certificates of title/registration with the South
Carolina Department of Revenue and Taxation, Division of Motor
Vehicles (DMV).
4 The two remaining affidavits were filed in March and April
1996. On these affidavits, Samuel certified fair market
values of the other two rebuilt vehicles totaling $9,925.
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