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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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