- 52 -
agreed to decrease taxable income to reflect an
interest expense payment made to John Cordes, Inc.
2. Respondent increased petitioner’s taxable income
by $138,424 to reflect income from misposted
receipts. The parties stipulated instead to
increase taxable income by $46,141.
3. Petitioner concedes respondent’s determination
increasing taxable income by $16,000 to reflect
payments on unidentified loans.
4. Respondent increased petitioner’s taxable income
by $211,612 to reflect income from unidentified
sources. The parties stipulated instead to
increase taxable income by $45,702.
5. Respondent increased petitioner’s taxable income
by $27,250 to reflect an overstatement to legal
and professional fees. The parties stipulated
instead to increase taxable income by $5,000.
IV. Docket No. 7369-99, Edmund J. and June J. Cordes:
A. 1994:
1. The parties stipulated that for 1994, the
following distributions constitute constructive
dividends from ECI: $88,225 from diversion of
checks from unidentified loans; $57,609 from
diversion of tag refunds; and $3,826 from excess
payoffs.
2. The parties stipulated that for 1994, the
following distributions constitute constructive
dividends from CFC: $10,380 from diversion of
checks from bad debt recoveries; $71,910 from
diversion of unbooked CFC income; and $45,702 from
an unexplained source of funds. Respondent
concedes that portion of his determination in
excess of the parties’ stipulation.
3. Petitioners concede receiving $14,078 in Social
Security benefits in 1994. The extent to which
they are taxable will be calculated in the Rule
155 computation.
4. Respondent made various computational changes to
petitioners’ taxable income because the increase
in constructive dividends increased petitioners’
taxable income so that the limitation of itemized
deductions was increased, itemized deductions were
eliminated, the standard deduction was allowed,
and the exemption amount under sec. 151(d)(3) was
reduced. The extent to which these changes affect
petitioners’ ultimate liability will be calculated
in the Rule 155 computation.
5. Respondent determined petitioner had self-
employment income, that petitioner was liable for
the self-employment tax on that income, and that
petitioner was entitled to a deduction for a
Page: Previous 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 NextLast modified: May 25, 2011