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terraces, planted cover crops, and cleared ditches to maintain
the land.
C. King’s Appliances
Petitioners bought an appliance store in Jacksonville,
Florida, around 1966, which they named King’s Appliances. King’s
Appliances sold appliances and furniture. Petitioners moved
King’s Appliances to Dothan, Alabama, around 1977.
1. Management of King’s Appliances
Mrs. King has managed King’s Appliances since 1966. She
makes decisions regarding inventory, record keeping, and filing
tax returns. Mrs. King paid each of the store’s monthly expenses
by check and recorded those expenses in spiral notebooks. She
kept canceled checks and most of the invoices. Mrs. King used
spiral notebooks to keep those records from 1967 to 1998. She
recorded payments for layaway sales on cards which she discarded
when a customer fully paid for an item. For tax purposes, Mrs.
King treated layaway sales as occurring in the year the customer
fully paid for the item.
Petitioners maintained separate bank accounts for King’s
Appliances and the farm and a personal savings account during the
years in issue. Mr. King worked part-time as a salesperson at
King’s Appliances during the years in issue.
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Last modified: May 25, 2011