- 20 -
553 F.2d 94 (2d Cir. 1977). SCC was a valid Minnesota
corporation. More critical to this question, SCC was engaged in
the construction business and houses were sold in its name during
the years in question. SCC was jointly listed with Mr. Strong on
account No. 893315300 where the receipts in dispute were
deposited. Checks for house sales were issued with SCC as the
payee. Mr. Strong chose to operate the construction business
through a corporation, not a sole proprietorship. Under these
facts, SCC must be recognized as a distinct taxable entity.
II. SCC’s Unreported Income and Expenses
The extent of SCC’s taxable income is a separate issue.
There are two distinct questions in this regard. First, should
the unreported deposits be treated as income, and second, should
SCC be allowed deductions against its income in addition to those
allowed by respondent?
A. Construction Income
The parties stipulated that the construction business earned
gross income of $264,800 in 1990, $524,720 in 1991, $531,900 in
1992, $85,448 in 1993, and $531,396 in 1994 from the construction
and sale of houses. This business was conducted in SCC’s name,
and the deposits of proceeds from these home sales should be
included in SCC’s gross income.
Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 NextLast modified: May 25, 2011