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Petitioner did not report any of the above-listed deposited
funds on his 1990, 1991, or 1992 returns. Furthermore,
petitioner’s accountants were not aware of this business activity
until after the IRS commenced its audit and investigation.12
F. Rental Property Income
During 1990, 1991, and 1992, petitioner owned and held
numerous real properties for investment and lease. One such
property was located at 41550 Boscell Road, Fremont, California
(the Boscell property). In 1990, petitioner owned 50 percent of
the Boscell property with Thomas Viviano. In May 1991, Thomas
Viviano sold his 50-percent interest in the Boscell property to
petitioner.
During the years at issue, the Boscell property was leased
to two tenants. One tenant, PSB Trucking, rented space at the
Boscell property for $8,400 per month. Petitioner reported
rental income attributable to PSB Trucking of $50,400,13 $79,800,
and $100,800 for 1990, 1991, and 1992, respectively.
12Petitioner argues that if unclaimed expense deductions are
considered, his racing business lost money.
13At trial, the parties stipulated that petitioner’s share
of the rental income from PSB Trucking with regard to the Boscell
Road property for 1990 is $46,200, rather than the amount
petitioner reported, $50,400. Respondent concedes that
petitioner reported his proportionate share of the rental income
attributable to PSB Trucking for 1991 and 1992.
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