- 100 - On the Schedule L attached to SLPC’s Form 1120S for 1995, SLPC’s “Other current liabilities” were reported to be $2,208,733 as of the end of that year. Of that amount, SLPC reported that $2,171,155 was “DUE TO AFFILIATE”. Also on this Schedule L, SLPC’s “Loans from shareholders” were reported to equal $1,219,000 as of the end of 1995. There were no amounts separately identified as interest payments made and/or imputed by SLPC to the Roses on its Form 1120S for 1995. There were no amounts separately identified as interest payments received and/or imputed by the Roses from SLPC on their joint income tax return for 1995. B. IRS Determinations The IRS determined that the Roses could deduct the losses that they reported from SLPC on their joint income tax returns for 1994 and 1995 to the extent of the basis in their SLPC interest. In calculating the Roses’ basis in their SLPC interest for those years, the IRS determined that the $350,000 transaction between TPC and SLPC in 1994 and the $800,000 transaction between TPC and SLPC in 1995 did not constitute debt owed to the Roses and did not increase the Roses’ basis in their SLPC interest. The IRS determined that “there was not an actual economic outlay” by the Roses and that “the debt was not directly attributable to” the Roses.Page: Previous 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 Next
Last modified: May 25, 2011