Patricia Barranco - Page 9




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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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