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1997, CPSG, Inc. informed petitioner that it was unable to make the minimum
royalty payments under the development agreement. The $3,150 is presumably
accrued interest for the period of nonpayment of minimum royalties.
The $52,500 paid on January 28, 1997, included the January 31,
1997, minimum royalty payment as contemplated under the
development agreement as well as an advance payment for the April
30, 1997, minimum royalty payment.
Petitioner paid CPSG, Inc. the following amounts as interest
on his $1.4 million indebtedness to CPSG, Inc.:
Date Amount For Period
12/29/96 $30,947.27 110/1995 - 09/1996
03/31/98 138,541.27 10/1/96 - 12/31/97
12/30/98 117,092.59 1998
12/21/99 111,595.20 1999
TOTAL 398,176.33
1 For the period Oct. 1995 to Sept. 1996, the record fails to state the
actual days upon which interest accrued.
Other Schedule C Expenses
On their Schedules C, petitioners reported the following
amounts as receipts and expenses for a consulting business named
“CPSG Ventures”12 for the years at issue:
1994 1995 1996
Receipts $194,317 $67,565 $72,118
Expenses 79,881 30,912 79,349
Net profit/loss 114,436 36,653 (7,231)
The receipts reported for CPSG Ventures for 1994 on petitioners’
Schedule C consisted of the following items:
CPSG, Inc. reimbursements1 $61,640
12“CPSG Ventures” is the name of both a partnership in which
petitioner was a general partner and petitioner’s Schedule C
business. See supra note 10.
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