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A. 1989
The parties calculated the Bensons’ 1989 omitted gross
income as follows:
Items of omitted Amounts asserted Amounts asserted
gross income by the Bensons by respondent
Payments from ERG to NPI -- $483,098
Check ref: Carroll $96,749 96,749
Automobile expenses 10,624 10,624
Life insurance 2,404 2,404
ERG payment related to -- 29,400
Lowell plant
Director’s fees 6,000 6,000
Franklin dividends 193 193
Interest/dividend (NPI) -- 861
Royalty income (1099) 709 709
Reverse royalty income -- 1(165,481)
recharacterized as
constructive dividends
Reverse NPI rental income -- 2(19,610)
recharacterized as
constructive dividends
Total 116,679 444,947
1 This amount represents a negative number. Respondent
appears to have reduced the $483,098 payment from ERG to NPI by
the amount of NPI’s royalty income reported by the Bensons on
their 1989 return.
2 This amount represents a negative number. NPI’s 1989 Form
1120S reported its income from gross rental real estate
activities and listed Burton O. Benson as a 66.7-percent
shareholder. Respondent appears to have reduced the $29,400 of
omitted gross income from the Lowell plant rent by the Bensons’
pro rata share of the Lowell plant rent ($29,400 x 66.7% =
19,609.8).
The parties assert that the Bensons reported gross income in 1989
as follows:
Items of gross Amounts asserted Amounts asserted
income by the Bensons by respondent
Wages $103,372 $103,372
Interest 2,505 2,505
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