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all Rule references are to the Tax Court Rules of Practice and
Procedure. All amounts have been rounded to the nearest dollar.
FINDINGS OF FACT
Some of the facts have been stipulated, and the stipulated
facts are incorporated in our findings by this reference. The
principal place of business of HJ Builders was in West Jordan,
Utah, at the time that the petition was filed at docket No.
8841-05. The Wrights resided in Salt Lake City, Utah, at the
time the petition was filed at docket No. 8842-05.
At all times relevant to these cases, Mr. Wright was the
sole shareholder and president of HJ Builders, a corporation
engaged in residential construction and real estate development.
Mr. Wright is known as Paul W. Wright, P. Wayne Wright, and Wayne
Wright. HJ Builders uses the cash method of accounting for tax
purposes.
Distributions to Mr. Wright
In 2001, Mr. Wright received a salary of $60,000 from
HJ Builders. Mrs. Wright received no wages from HJ Builders that
year. Additional miscellaneous checks totaling $72,000 were paid
to Mr. Wright by HJ Builders in 2001. These additional amounts
were not reported as income on the Wrights’ 2001 Federal income
tax return.
HJ Builders organized its receipts and disbursements using a
system of account codes, each identifying a different category of
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Last modified: May 25, 2011