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petitioner, his outside accountant incorrectly assumed that
Eureka Field Nursery owned the Miami property since it claimed
depreciation on the structure in 1985. This assumption led the
outside accountant to increase Eureka Field Nursery’s assets by
$491,182.26 on Schedule M of its 1985 Form 1120S. Petitioner
states that he discovered this mistake in 1986 and then ordered
the outside accountant to remove the item from the Schedule L
balance sheet. This led, according to petitioner, to reductions
in the accumulated adjustment account of $155,440.09 in 1986 and
$31,543 in 1987 and an increase of $698 in 1988.
We have already found that petitioner has not established
that his cost basis in the Miami property was $446,985.19.
However, even if we were to accept petitioner’s assertion that
his cost basis in the structure was $446,985.19, it does not
necessarily follow that the subsequent reductions in the
accumulated adjustment account related to the Miami property. If
the “other reductions” entry on Eureka Field Nursery’s 1986 Form
1120S was an entry to remove the structure from the Schedule L
balance sheet, then the entry would have been approximately
$491,182.26, not $155,440.09.
Petitioner did not offer any evidence to substantiate his
claim. Petitioner did not call the outside accountant as a
witness. We can only presume that any testimony supplied by that
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