Duncan & Associates - Page 3

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               During 1990, petitioner sold a business interest to the                
          Chicago Board of Trade for $125,000.  At the time of that sale,             
          petitioner’s adjusted basis in that business interest was                   
          $16,081.  (We shall refer to the amount petitioner received on              
          the sale of its business interest (i.e., $125,000) reduced by               
          petitioner’s adjusted basis in that interest (i.e., $16,081) as             
          petitioner’s 1990 amount realized.)  At all relevant times,                 
          petitioner through Mr. Duncan knew that at least a portion of the           
          $125,000 that it received during 1990 on the sale of its business           
          interest constitutes income to petitioner for that year.                    
               On or about April 13 and July 18, 1991, petitioner received            
          checks totaling $49,500, which were not deposited into any bank             
          account of petitioner but which Mr. Duncan retained and/or                  
          deposited in his bank account.  At all relevant times, petitioner           
          through Mr. Duncan knew that $40,000 of the total $49,500 in such           
          checks constitutes income to petitioner for 1991.  (We shall                
          refer to such $40,000 of such checks as petitioner’s 1991 check             
          amount.)                                                                    
               During 1990 and 1991, respectively, petitioner made payments           
          or other transfers to or on behalf of Mr. Duncan of amounts                 
          totaling $293,650.112 and $460,263.56.  Petitioner failed to                


               2Of the $293,650.11 in payments or other transfers to or on            
          behalf of Mr. Duncan that petitioner made during 1990, $9,610 was           
          paid to Georgio Armani for the purchase of clothing for Mr.                 
          Duncan.                                                                     





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