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lessee and Colmeno of Colorado, Inc., as lessor. The lease
commenced in January 1994, and was to run until 2003. The
arrangements required Mr. Hendricks to make annual payments
totaling $350,550 consisting of payments for the land lease, an
equipment lease, a loan of $655,600 from a firm called Menotex, a
prior mortgage, and real property taxes. The farming enterprise
failed because Mr. Hendricks was unable to meet the income
projections needed to service the payments. On February 21,
2001, he liquidated the farming enterprise and sold its assets at
an auction. It took Mr. Hendricks until January 2004 to finally
pay off all creditors from that undertaking.
On June 18, 1998, we issued an Order to Show Cause why the
Boulder Oil and Gas case should not be decided in accordance with
several test cases. On November 23, 1998, we issued an Order and
Decision granting respondent’s Motion for Entry of Decision,
making adjustments to the partnership items of Boulder Oil and
Gas for the 1983 tax year.
On October 14, 1999, respondent sent a letter to the
Hendrickses transmitting a Form 4549A-CG, Income Tax Examination
Changes, explaining how the adjustments made during the TEFRA
proceeding affected their individual income tax return for 1983.
Respondent assessed the Hendrickses’ deficiency for 1983 on
February 16, 2000.
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