- 23 -
Items of omitted Amounts omitted
gross income by the Bensons
Payments from ERG to NPI $483,098
Check ref: Carroll 96,749
Automobile expenses 10,624
Life insurance 2,404
ERG payment related to 29,400
Lowell plant
Director’s fees 6,000
Franklin dividends 193
Royalty income (1099) 709
Reverse royalty income 1(165,481)
recharacterized as
constructive dividends
Reverse NPI rental income 1(19,610)
recharacterized as
constructive dividends
Total 444,086
1 This amount represents a negative number.
2. Reported Gross Income
The parties agree that the Bensons reported gross income of
$535,041, which consists of: (1) Wages of $103,372; (2) interest
income of $2,505; (3) rental income totaling $24,950; (4) royalty
income totaling $166,872; (5) other income from NPI of $100,000;
and (6) income from the Evelyn C. Hermsmeir partnership of
$137,342.13 Additionally, respondent concedes that the Bensons
reported income of $625 from the Baden Spiel Haus partnership.
13 The Bensons assert that their 1989 return reported income
of $137,341 from the Evelyn C. Hermsmeir partnership. Respondent
argues that the Bensons reported $137,342 on their return from
the Evelyn C. Hermsmeir partnership. We will calculate the
Bensons’ reported gross income using respondent’s figure, as it
is more favorable to the Bensons than their own calculation.
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