- 4 -
proprietorship. Demetree and Associates’ principal business
activities were the leasing and management of commercial
warehouses owned by partnerships in which Arthur was a partner.
The total management responsibilities relating to Demetree and
Associates were minimal (e.g., the collection of rents and
supervision of repairs). From 1983 through 1991, David
occasionally assisted Arthur by performing services for Demetree
and Associates. David also signed, pursuant to a power of
attorney, Arthur’s name on Demetree and Associates’ business
checks and deposit slips, including checks payable to himself or
to third parties on his behalf. Arthur did not deduct the
amounts he transferred to David, issue David Forms W-2, Wage and
Tax Statements, or issue Forms 1099-MISC, Miscellaneous Income.
Arthur and Naomi reported the income attributable to Demetree and
Associates on the Schedules C, Profit or Loss From Business,
accompanying their 1983, 1984, 1985, and 1986 joint Federal
income tax returns.
In 1986, Arthur and Naomi lent David funds to purchase a
one-third interest in a partnership formed to build North Lane
Plaza (NLP), a strip mall. The following year, Arthur and Naomi
also lent David funds to start and operate Scooper’s Ice Cream
(Scooper’s) in one of NLP’s stores. Scooper’s produced losses
during all its years of operation until David sold it in 1989.
In 1987, 1988, 1989, and 1992, David claimed net operating loss
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011