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resolution. In 2002, Ms. Mohr was awarded $159,575.82 by NASD,
of which Mr. Wright was responsible for $123,342.14.16
Mr. Wright made what he characterized as a $50,000
accounting adjustment to reflect and create a reserve for Ms.
Mohr’s NASD claim on Wright & Associates’ 1999 tax return. On
the 1999 Form 1120S, $50,000 was included in the $53,485 return
and allowance amount listed on line 1(b), which was subtracted
from gross receipts or sales on line 1(a). As a result, Wright &
Associates’ and ultimately petitioners’ taxable incomes were
decreased by $50,000 for 1999. The accounting adjustment
offsetting the debit entry to return and allowance was a credit
to a shareholder loan payable account for Mr. Wright.
3. Offshore Credit Card Account
Petitioners maintained an offshore credit card at Leadenhall
in the name of Sarasota Investment Club #2 for all of the years
in issue. On October 22, 1999, petitioners deposited six $9,000
checks, totaling $54,000, into their bank account at Leadenhall.
One Leadenhall deposit check was dated October 4, 1999, two were
dated October 5, 1999, and three were dated October 6, 1999.
Petitioners used their credit card to make personal expenditures
15(...continued)
participation in the class action lawsuits.
16Prim Securities settled with Ms. Mohr for $36,233.68,
which was deducted from Ms. Mohr’s award of $159,575.82.
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