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allocated one-half ($60,500) of the commission to petitioner as her
share. Mr. Riccardi paid petitioner $14,000 on March 29, 1996. At
that time he told her that $46,500 of the balance of her commission
would be retained by him and used to offset the expenses he had
incurred in excess of the rent petitioner had paid and the $20,000
profit he expected from the Aspen Road Property. He paid
petitioner an additional $6,000 on August 13, 1996.
In May or June 1996, Mr. Riccardi again listed the Aspen Road
property for sale. Mr. Riccardi sold the Aspen Road property
before the end of 1996. Petitioner was required to vacate the
Aspen Road property before settlement on the sale of the house.
She moved out of the property by the end of the year, after Mr.
Riccardi agreed to pay her moving expenses. As a result of
petitioner’s failure to pay the monthly rent on the Aspen Road
property, Mr. Riccardi incurred more than $3,000 of additional
interest expenses and other costs. In January 1997, Mr. Riccardi
paid $5,998.50 of petitioner’s moving expenses.
The M. Riccardi Agency issued a Form 1099-Misc, Miscellaneous
Income, to petitioner reporting $60,500 of nonemployee compensation
in 1996. In addition to the commission on the sale of the shopping
center, petitioner earned $6,199 in wages and $14 of interest.
Petitioner did not file a Federal income tax return for 1996.
Respondent issued a notice of deficiency to petitioner based on
Forms 1099 and W-2, Wage and Tax Statement, and other documents
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Last modified: May 25, 2011