George Maciel - Page 6

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               On April 27, 1990, petitioner sold his 50-percent interest             
          in M&V Investments (Tri-City and Newark Wreckers) to Mr. Viviano            
          for $200,000.  The $200,000 purchase price was paid in the form             
          of three cashier’s checks for $100,000, $75,000,and $25,000,                
          which were initially made payable to Mr. Viviano but were                   
          subsequently endorsed to petitioner.  Pursuant to the sales                 
          agreement, petitioner relinquished all claims he had in Tri-City            
          and Newark Wreckers, and he was discharged from his obligation to           
          pay on the note to Mr. Giarrusso.5  Petitioner did not report               
          this sale on his 1990 return.6                                              

               5The Escrow Statement, Bulk Transfer Escrow Instructions,              
          and Security Agreement list petitioner’s and Mr. Viviano’s                  
          indebtedness to Mr. Giarrusso as $200,000.  The 1990 Schedule L,            
          Balance Sheet, for Tri-City lists the indebtedness as $202,000.             
          Respondent describes petitioner’s indebtedness as being $101,000.           
          We assume respondent used the $101,000 as opposed to the $100,000           
          on the basis of Tri-City’s 1990 Schedule L.  We further assume a            
          scrivener’s error on the part of Tri-City’s tax return preparer             
          for 1990 and assign no substantive significance to this                     
          discrepancy.                                                                
               6Petitioner did, however, attach a statement to his 1990               
          income tax return which states:                                             
                 THE ABOVE NAMED TAXPAYER WAS INVOLVED IN A                           
                 PARTNERSHIP FOR PART OF THE 1990 TAX YEAR.  THE                      
                 PARTNERSHIP WAS TRI-CITY TRUCK PARTS.  THE                           
                 TAXPAYER DID NOT RECEIVE HIS SCHEDULE K-1 (SHARE                     
                 OF PARTNERSHIP INCOME & DEDUCTIONS) FOR 1990.                        
                 SEVERAL ATTEMPTS WERE MADE TO REACH THE DESIGNATED                   
                 PARTNER OF TRI-CITY TRUCK PARTS (PETER VIVIANO).                     
                 ALL ATTEMPTS WERE UNSECCESSFUL [sic].  AS A RESULT                   
                 THE ABOVE NAMED TAXPAYER WAS UNABLE TO REPORT HIS                    
                 SHARE OF THE PARTNERSHIP’S ACTIVITY FOR THE 1990                     
                 TAX YEAR.                                                            
                                                             (continued...)           





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