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In addition to Alviso and GMT, petitioner engaged in the
following noncorporate business activities.
B. The BAMA Partnership
In 1989, petitioner entered into a partnership with Michael
D. Mitchem named BAMA Equipment (BAMA). BAMA was engaged in the
business of selling new and used trucks. Petitioner owned a 50-
percent interest in BAMA.
During the years in issue, BAMA wrote numerous checks to
petitioner and/or his related corporation(s), which he deposited
into noncorporate bank accounts over which he had signatory
authority. BAMA paid petitioner rent for the use of one of his
real properties, which he deposited into the aforesaid bank
accounts. BAMA was also a sponsor of petitioner’s racing
business.3
On his 1991 and 1992 returns, petitioner claimed deductions
for passthrough losses from BAMA of $56,786 and $8,777,
respectively. For those years, petitioner’s capital accounts in
BAMA were negative $26,046 and $34,823, respectively. As
previously stated, respondent concedes loss deductionss for 1991
and 1992 of $26,046 and $8,777, respectively. Additionally,
respondent concedes petitioner’s capital loss deduction of $3,000
for 1992.
BAMA dissolved in 1992.
3Petitioner’s racing business is discussed in detail below.
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