- 9 -
Reported 1994 1995
Gross receipts/sales $224,718 $217,296
Deductions:
Compensation to 14,520 --
officers
Salaries and wages 122,528 119,170
Rents 24,475 29,026
Taxes and licenses 16,719 14,880
Depreciation 20,180 17,680
Other deductions 26,268 36,387
Taxable income 28 153
Total tax 4 23
In preparing the 1995 corporate income tax return of Sam
Kong Fashions, an employee of Kim Y. Ling, P.C., made a
mathematical mistake in calculating the gross receipts. The
employee listed the corporation’s gross receipts as $217,296.06
instead of $241,890.9
Sam Kong Fashions did not claim a deduction for the cost of
thread used in its sewing business on its 1994 corporate income
tax return. On its 1995 corporate income tax return, the
corporation reported a business expense deduction of $12,013 for
the cost of thread.10
In 1994 and 1995, Kim Y. Ling, P.C., prepared a depreciation
schedule for the equipment purchased by Sam Kong Fashions. Kim
9 The parties agree that the sum of the 1995 gross receipts
reported to Kim Y. Ling, P.C., totaled $241,890.
10 On brief, petitioners assert that either Mr. Kong or Sam
Kong Fashions is entitled to a deduction of at least $40,000 to
$50,000 for thread used in its sewing business in 1994.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011