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return totaling $44,818. The IRS determined that the Mansours
should have reported this amount on their 1997 return as income
from self-employment.
C. 1998
The IRS made the following determinations with respect to
the Mansours for 1998:
1. Distributable Gain From the Sale of Property by
Tomson
Tomson had a $413,696 basis in the property that it sold to
Sembler and recognized a $408,304 gain on the sale. The IRS
determined that Tomson was an S corporation during 1998 and that
$204,152 of this gain was attributable to the Mansours. Because
the Mansours reported a $45,000 loss from this sale on their 1998
return, the IRS adjusted the Mansours’ income to reflect this
gain.
2. Corporate Distributions
The Mansours received and deposited into their personal bank
account at SunTrust checks from Ava Anthony, net of repayments,
totaling $16,500. 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 SunTrust checks from Mansour Enterprises, net of
repayments, totaling $22,600. The IRS determined that Mansour
Enterprises was an S corporation during 1998 and that the
Mansours had failed to establish their basis in their Mansour
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