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To do the necessary repairs, Mr. Muhammad obtained a home
rehabilitation loan of $32,949.85 from Wells Fargo Home Mortgage,
Inc. Petitioner was the general contractor of record on this
home rehabilitation loan. Wells Fargo Home Mortgage, Inc. issued
the proceeds of Mr. Muhammad’s home rehabilitation loan on August
28, 2000, and October 11, 2000, by checks jointly payable to both
Mr. Muhammad and petitioner in the amounts of $12,261.67 and
$20,688.18, respectively. Both Mr. Muhammad and petitioner
endorsed these checks. Mr. Muhammad deposited the proceeds from
these checks into his bank account at Shore Bank. Wells Fargo
Home Mortgage, Inc. also issued to petitioner a Form 1099-Misc,
Miscellaneous Income, for taxable year 2000 reflecting a
distribution to petitioner of nonemployee compensation in the
amount of $32,949.85.
At the beginning of their work relationship, petitioner and
Mr. Muhammad did not enter into any contract outlining the scope
of the work to be performed. Petitioner testified he and Mr.
Muhammad entered into a contract later in taxable year 2000.
However, no contract was offered into evidence at trial.
Petitioner received and negotiated the following checks
totaling $24,312 drawn on Mr. Muhammad’s Shore Bank account
payable to petitioner:
Date Check # Memo Amount
09/03/2000 4656 $100
09/12/2000 4657 Tax from Wells Fargo 122611,861
09/24/2000 4661 Dumpster 300
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Last modified: May 25, 2011