Conrad Janis and Maria G. Janis - Page 12

                                       - 12 -                                         
                     Year     Original COGS       Amended COGS                        
                     1990         $48,891           $102,000                          
                     1991       1,235,185          1,660,000                          
                     1992           35,000            45,000                          
          This increase in its COGS caused the gallery to generate a larger           
          net loss for each of those years.  Consequently, the trust’s net            
          operating loss for 1990 increased, the amount of the net                    
          operating loss from 1990 that was applied against the trust’s               
          income earned in 1991 decreased, and the trust’s net operating              
          loss for 1992 increased.                                                    
               The trust’s fiduciary income tax returns for 1993, 1994, and           
          1995 also reflected the gallery’s use of the collection’s                   
          undiscounted value as the value for its inventory.  On those                
          returns, the gallery reported the following amounts from its                
          operations:                                                                 
                     Year              COGS             Net Loss                      
                     1993            $235,000           $727,416                      
                     1994             727,500            117,363                      
                1/1/95-11/8/95      3,365,040            804,141                      
          The trust’s fiduciary income tax return filed for 1995 reported             
          the trust’s operations for the period between January 1, 1995,              
          and November 8, 1995 (i.e., the day on which the trust was                  
          terminated), and was the trust’s final return.  The trust’s                 
          fiduciary income tax return for 1995 reported that the value of             
          the gallery’s inventory was $31,518,850 as of November 8, 1995.             








Page:  Previous  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  Next

Last modified: May 25, 2011