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of stockholders and directors. Petitioner was not present at
this meeting.10 The minutes signed by Mr. Turner indicated that
petitioner was elected to serve as vice president and as a member
of the board of directors until the next annual meeting.
For the taxable year 1999, Union Machine filed a Form 1120S,
U.S. Income Tax Return for an S Corporation. The Form 1120S
reported that petitioner and Mr. Turner were its only
shareholders at the end of the taxable year 1999. Attached to
the Form 1120S, inter alia, was a Schedule K-1, Shareholder’s
Share of Income, Credits, Deductions, etc., for each shareholder.
Petitioner’s Schedule K-1 reported his pro rata share as follows:
Ordinary income of $8,375; investment interest income of $72;
depreciation of $1,343; and nondeductible expenses of $81.
On December 5, 2000, Union Machine held its annual meeting
of stockholders and directors. The minutes of this meeting
signed by Mr. Turner indicated that petitioner was not present at
the meeting, but that he was reelected to serve on the board of
directors until the next annual meeting.
For the taxable year 2000, Union Machine filed Form 1120S.
The Form 1120S reported that petitioner and Mr. Turner were its
only shareholders at the end of the taxable year 2000. Attached
10 Since leaving Union Machine in 1998, petitioner has not
received any written notice of the annual meetings. We note that
the 1999 minutes incorrectly stated that petitioner was present
at the meeting.
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