- 8 - did not always maintain a cash disbursements journal or a cash receipts journal. Mr. Feldmann was never provided with a complete listing of BBP’s assets and liabilities, and he never prepared a balance sheet for the partnership.10 Neither the partnership nor Mr. Feldmann prepared yearend trial balances. Partnership capital accounts for BBP were never maintained. The 1993 and 1994 Forms 1065 reported that Melvin and Russell had balances of “0" in their respective capital accounts at both the beginning and the end of those taxable years.11 On the 1993 and 1994 Forms 1065, BBP reported on the Schedules L, Balance Sheet, that the total assets and total liabilities of the partnership at the beginning and the end of those taxable years were “None”.12 A calculation of each partner’s capital contributions to the partnership cannot be made given the state of BBP’s records. Additionally, a calculation of the distributions made to each 10In the mid-1980s, Mr. Feldmann recommended that BBP maintain a balance sheet showing the partnership’s assets and liabilities. 11For the taxable years 1980 through 1992, the areas designated on the Forms 1065 and Schedules K-1, Partner’s Share of Income, Credits, Deductions, Etc., attached to the Forms 1065 pertaining to information concerning Melvin’s and Russell’s respective capital accounts were left blank. For the taxable years 1993 and 1994, the Forms 1065 were also left blank; however, the Schedules K-1 listed the amounts in Melvin’s and Russell’s respective capital accounts at the beginning and end of those taxable years as “0". Russell signed BBP’s partnership tax returns for the years 1993 and 1994. 12For the taxable years 1980 through 1992, the Schedules L, Balance Sheet, on BBP’s Forms 1065 were left blank.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