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payable, and CDM, not Colorcom, is the debtor. During 2001, CDM
paid petitioner $15,000 of the account payable.
On October 17, 2002, petitioners filed a timely joint
Federal income tax return for 2001 (original return). On their
original return, petitioners included Schedule D, Capital Gains
and Losses, on which they reported $199,375 from the sale of
159,500 Colorcom units. Petitioners reported zero basis for the
units. Petitioners did not include the amounts listed on
Schedule D in the computation of their taxable income and related
tax liability on the original return.
Based on the original return, respondent mailed petitioners
a notice of deficiency stating that “Income reported on Schedule
D line 17 was not transferred to the 1040 tax return line 13.”
On February 26, 2004, petitioners filed an amended Federal
income tax return (first amended return) for 2001. On the first
amended return, petitioners reported the same sales price of
$199,375 from the sale of 159,500 Colorcom units on Schedule D
but also reported a basis of $184,375 with a resulting long-term
capital gain of $15,000. The $184,375 of basis reported on the
first amended return is the remaining account payable from CDM to
petitioner as of December 31, 2001. Petitioners included the
$15,000 from Schedule D in the computation of their taxable
income on the first amended return.
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Last modified: May 25, 2011