- 19 - 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 2,505Page: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Next
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