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MEMORANDUM OPINION
GOEKE, Judge: These cases arise from petitions for judicial
review filed in response to the notices of deficiency mailed to
Kenneth W. Stejskal, Sr. and Jane Stejskal and to several of
their trusts. Pursuant to a stipulation of settled issues, the
income and expenses of the alleged trusts have now been collapsed
into the tax liabilities of Kenneth and Jane Stejskal
(petitioners). The sole remaining issue for decision is the
proper amount of petitioners’ cost of goods sold in light of the
shrinkage to inventory suffered to the Kansas operation of their
dietary supplement business. We hold that while petitioners may
subtract the amount of product that is no longer saleable from
the ending inventory, they may not also add the same amount to
product purchases in calculating their cost of goods sold.
Background
These cases were submitted fully stipulated pursuant to Rule
122, and the facts are so found.2 The stipulations of facts and
the accompanying exhibits are incorporated herein by this
reference. At the time of the filing of the petitions,
petitioners resided in Corpus Christi, Texas.
2Unless otherwise indicated, all section references are to
the Internal Revenue Code, as amended, and all Rule references
are to the Tax Court Rules of Practice and Procedure.
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Last modified: May 25, 2011