Orneal and Martha Kooyers, et al. - Page 14

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          return.  Respondent also disallowed the $1,005 net operating loss           
          and imposed the accuracy-related penalty under section 6662(a).             
               In the notice of deficiency issued to the OMK Company Trust,           
          respondent disallowed all items deducted on the trust’s 1998                
          return, increasing the trust’s taxable income by $129,899.                  
               In the notice of deficiency issued to petitioners,                     
          respondent determined that the OMK trusts should be disregarded             
          for Federal income tax purposes and consequently made the                   
          following adjustments to petitioners’ income:                               
                     Item                           Adjustment                        
                     Taxable Social Security        $25,104                           
                     Capital gain                   123,791                           
                     Self-employment tax            (7,191)                           
                     Itemized deductions            (10,127)                          
                     Standard deduction             8,800                             
                     Exemptions                     5,400                             
                     Service income Mr. Kooyers     55,974                            
                     Fiduciary fees Mr. Kooyers     (2,500)                           
                     Service income Mrs. Kooyers    50,814                            
                     Fiduciary fees Mrs. Kooyers    (2,500)                           
                     Dividend income                2,089                             
                     Interest income                168,868                           
               Respondent determined that the income from P.I. Ministries             
          was subject to self-employment tax of $15,089.  Respondent also             
          determined that petitioners were liable for the civil fraud                 
          penalty under section 6663 or, alternatively, for an                        
          accuracy-related penalty under section 6662(a) and (b)(1) for               
          negligence or disregard of rules or regulations.                            







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