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In conjunction with his plea arrangement, Dr. Barranco filed
amended individual income tax returns reporting his previously
omitted gross income for the tax years at issue. Petitioner did
not participate in preparing the amended tax returns filed
pursuant to Dr. Barranco’s plea arrangement. Only the 1988
amended tax return bears a signature purported to be
petitioner’s.
In February 1996, Dr. Barranco was sentenced to 27 months’
incarceration, which he began serving in March 1996. While Dr.
Barranco was incarcerated, his medical practice corporation
continued to pay him a $3,000 monthly salary.
VI. Petitioner’s Transfer of Property to Children
As previously discussed, in the 1980s petitioner became the
sole titleholder of several real properties that had been
acquired with funds provided by Dr. Barranco. These real
properties included about 130 acres in or adjacent to Woodland
Hill Estates, the Barrancos’ primary residence situated therein,
and the Smith Mountain Lake vacation home and lots. In July
1996, petitioner deeded all these real properties to a newly
established limited liability company that her four children
owned. In exchange, petitioner received the children’s note in
the principal sum of $617,400, payable at 3-percent interest in
179 equal payments of $1,987.89 each, and a final balloon payment
of $518,532, due August 1, 2011.
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Last modified: May 25, 2011