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therefore, such deposits constituted gross income of Omnitec
Missouri. The notice of deficiency is based on that
determination. No evidence was presented to show that the
deposits were payments for services provided by Omnitec Nevada or
L.V. Properties, Inc. The witnesses offered by petitioner
essentially corroborated respondent’s case.
The only income tax returns filed were those filed by
Omnitec Nevada, which reflected income and expenses as follows:
FYE 9/30/98 FYE 9/30/99
Income
Gross receipts $61,634 $47,486
Expenses
Repairs, maintenance 1,506 249
Rents 22,275 28,887
Taxes and licenses 45 -0-
Advertising 1,260 3,200
Other expenses (per an
attached schedule) 40,419 34,130
Total expenses 65,505 66,466
Net losses ($ 3,871) ($18,980)
The returns, accordingly, showed no Federal income taxes due for
the 2 fiscal years. In the notice of deficiency, respondent
determined that the trade or business activity was that of
Omnitec Missouri and determined taxable income as follows:
FYE 9/30/98 FYE 9/30/99
Income
Gross receipts $89,870 $60,989
Gross rents 20,450 9,419
Omnitec expenses (41,910) (33,185)
Rental expenses (4,504) (3,996)
Taxable income 63,906 33,227
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Last modified: May 25, 2011