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Background
Petitioners timely filed their joint income tax returns for
1991, 1992, and 1993. Petitioners were owners3 and operators of
a subchapter C corporation named Pauline’s Concrete Pumping,
Inc.4 (Pauline’s Concrete). At the time the petition was filed,
petitioners resided in Philadelphia, Pennsylvania.
On February 15, 1987, petitioners in their individual
capacities entered into a “Master Lease Agreement” with Pauline’s
Concrete (the lease). The lease contemplated that petitioners
would provide certain equipment to Pauline’s Concrete and that
Pauline’s Concrete was responsible for all costs, including the
costs associated with the acquisition and maintenance of the
equipment and for all the insurance costs. The lease term was 10
years. Attached to the lease was an exhibit which listed the
following equipment contemplated by the lease:
3For the taxable years at issue, petitioners were the only
shareholders of Pauline’s Concrete Pumping, Inc.
4The stipulations filed by the parties use the names
“Pauline’s Concrete Pumping, Company,” “Pauline’s Concrete
Pumping Company, Inc.,” and “Pauline’s Concrete Pumping Inc.” It
is apparent that the stipulations refer to the same entity.
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Last modified: May 25, 2011