James O. Jondahl - Page 32

                                       - 32 -                                         
         the crop hail insurance business for $25,000.  Respondent argues             
         that the $25,000 is income to petitioner in 1990.  Petitioner has            
         the burden of proving that the sale proceeds were not income to              
         him.  Petitioner maintains that WFIC owned the crop hail                     
         insurance business when it was sold.                                         
              Petitioner did not present any documentation of the                     
         purported transfers of the business to Taxman and to WFIC.  In               
         the 1987 deposition, petitioner admitted that the transfer to                
         Taxman was not documented.  The 1990 purchase agreement was                  
         between Mr. Ihry and Jondahl Insurance, not WFIC.  Likewise, the             
         checks paid for the purchase of the business by Mr. Ihry were                
         made out to Jondahl Insurance, although petitioner deposited the             
         checks into WFIC’s bank account.  Jondahl Insurance was a party              
         to agency agreements with Farmer’s Mutual and Old Republic                   
         Insurance Co. in 1986 and 1989, after its alleged transfer.                  
         Neither Taxman nor WFIC is mentioned on either contract.                     
         Farmer’s Mutual listed “Jondahl Insurance Agency” on its policy              
         registers for 1990 and 1991.  Petitioner has not shown any                   
         evidence to support his claim that his insurance customers                   
         received bills from Taxman or that any customers were confused as            
         to the ownership of the business.  In addition, petitioner did               
         not report capital gain from the sale of the insurance business              
         on WFIC’s 1990 or 1991 corporate return.                                     







Page:  Previous  22  23  24  25  26  27  28  29  30  31  32  33  34  35  36  37  38  39  40  41  Next

Last modified: May 25, 2011