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2000
Trust Income and Expenses to Be
Charged to Petitioners Amount
NHUSS Trust income $786,223
In God We Trust income adjustment (169,425)
Ordinary recapture income 29,770
Rental income 19,200
Cost of goods sold (265,153)
Gross income adjustment (70,000)
Commission expense (27,334)
Car and trust expense (18,374)*
Home office expense (7,866)
Meals and entertainment expense (2,766)
Travel expense (1,035)
Charitable deduction (336)
* At trial, respondent stated that the parties agreed
that petitioners’ car and truck expenses in 2000 were
$15,691. The parties, however, stipulated in writing that
the car and truck expenses were $18,374, and we use the
stipulated amount.
The parties’ stipulation does not separately identify any
income and expenses of RJ Pendergraft Trust that are to be
charged to petitioners. We understand, however, that the income
and expenses of RJ Pendergraft Trust were appropriately collapsed
into petitioners’ income and expenses and are reflected in the
above figures.
OPINION
Burden of Proof
Generally, under section 7491(a), the burden of proof
relating to factual issues relevant to an individual’s tax
liability may shift from the taxpayer to respondent where the
taxpayer: (1) Has credible evidence to substantiate the item in
question; (2) has maintained appropriate records relating
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