Kamil F. and Nagwa Gowni - Page 18

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                    1.  Unreported Income From the Operations of Mansour              
          Enterprises                                                                 
               The corporate income tax return for Mansour Enterprises for            
          1996 reported ordinary income of $53,400 from its operations                
          during that year.  The IRS determined that Mansour Enterprises              
          was an S corporation during 1996 and that the Mansours’                     
          distributable share of this income was $26,700.  The Mansours               
          reported income from the operations of Mansour Enterprises in the           
          amount of $9,044 on their 1996 return.  Accordingly, the IRS                
          determined that the Mansours should have included an additional             
          $17,656 in income.                                                          
                    2.  Corporate Distributions                                       
               The Mansours received and deposited into their personal bank           
          account at First Union checks from Micca, net of repayments,                
          totaling $52,000.  The IRS determined that the Mansours should              
          have reported this amount as dividend income.                               
               The Mansours received and deposited into their personal bank           
          account at First Union checks from Mina of Forest City, net of              
          repayments, totaling $24,484.  The IRS determined that Mina of              
          Forest City was an S corporation during 1996 and that the                   
          Mansours had failed to establish their basis in their Mina of               
          Forest City stock.  Accordingly, because the Mansours reported              
          income of $10,454 from the operations of Mina of Forest City on             
          their 1996 return, the IRS determined that the Mansours should              







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