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dump truck, a flatbed, and an old wrecker. This equipment was
primarily used to move vehicles and to haul scrap items.
In 2001, Flair Enterprises spent approximately $180,000 for
additional equipment, shop buildings, and improvements to the
80-acre tract. Expenses were also incurred and paid by Flair
Enterprises for house plans and preliminary plumbing and
inspection work for the sites where the race shop and homes of
petitioners and their two sons were to be built. The assets
acquired by Flair Enterprises in 2001 included two entryway signs
for the 80-acre tract, a second brush hog mower, a lawnmower, and
various other pieces of equipment. For a total cost of
$81,315.74, two buildings were also purchased by Flair
Enterprises that year and placed on the tract for use as
petitioner’s race shop. Flair Enterprises also made substantial
expenditures in 2001 for cleanup of a preexisting oil well site
on the 80-acre tract, fencing, drainage, construction of entry
signs and of the race shop building, and other improvements to
the land.
In 2002, the year that petitioners moved into their new
house on the 80-acre tract, Flair Enterprises deducted on its tax
return $226,477.10 of costs classified as improvements, the
majority of which relate to improvements to the 80-acre parcel of
land and construction of the personal residences of petitioners
and their two sons. The substantiation information provided for
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Last modified: November 10, 2007