Franchise and Income Tax Formal Legal Opinions Adopted in 1986

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Appeal No. Appeal Name Date
86-SBE- 001 ALEXANDER GLEN
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
Health & Saf. Code, section 11350, et seq.
Feb. 4, 1986
86-SBE- 002 ALLEN, WILLIS M. AND RUTH A.
OTHER STATE TAX CREDIT
DOUBLE TAXATION
PREFERENCE TAX
Revenue and Taxation Code § 18001
Feb. 4, 1986
86-SBE- 003 ANDERSON, IDA B.
ENERGY CONSERVATION TAX CREDIT
CREDIT – ENERGY CONSERVATION
Revenue and Taxation Code § 17052.4
Feb. 4, 1986
86-SBE- 004 ANDRESIAN, ANDRE AND SUZANNE
BAD DEBT DEDUCTION
YEAR OF INCLUSION
BUSINESS/NONBUSINESS INCOME
Feb. 4, 1986
86-SBE- 005 BUILDING INDUSTRY ASSOCIATION OF SUPERIOR CALIFORNIA
EXEMPT INCOME
TAX EXEMPT ORGANIZATION
INSURANCE COMPANIES
Revenue and Taxation Code § 23734
Treas. Reg. 1.513
Carolinas Farm & Power Equipment Dealers v. United States (4th Cir. 1983) 699 F.2d 167; Professional Ins. Agents of Michigan v. Commissioner (6th Cir. 1984) 726 F.2d 1097.
Feb. 4, 1986
86-SBE- 006 CARVER, BRUCE A. AND SUSAN E., AND
RANDALL B. AND SUZETTE CARVER

RETAINED EARNINGS
RELATED PARTY TRANSACTIONS
LOAN RECOURSE/NON RECOURSE
DIVIDENDS RECEIVED/DIVIDEND INCOME
CLOSELY HELD CORPORATIONS
ADVANCE PAYMENTS
Feb. 4, 1986
86-SBE- 007 CASSEBARTH, GEORGIA
BAD DEBT DEDUCTION
YEAR OF INCLUSION
Revenue and Taxation Code § 17207
Feb. 4, 1986
86-SBE- 008 CHARLES MCCANDLESS TILE CONTRACTOR, INC.
ACCOUNTING METHODS
BAD DEBT RESERVE
Revenue and Taxation Code § 24348
Black Motor Co. v. Commissioner (1940) 41 B.T.A., 300 AFFD. On other issues, 125 F. 2d 977 (6th Cir. 1942).
Feb. 4, 1986
86-SBE- 009 CORSO, JOE
NOTE – AT RISK/RECOURSE/NON RECOURSE/VALUE
CHARACTER OF GAIN
BASIS
GAIN OR LOSS – GENERAL
Revenue and Taxation Code § 18031
Feb. 4, 1986
86-SBE- 010 CROMWELL, MARTIN F. AND PATRICIA G.
RESIDENCY
DOMICILE – COMMERCIAL/INDIVIDUAL
Revenue and Taxation Code § 17014
Feb. 4, 1986
86-SBE- 011 EMMERSON, CAROLYN I., GEORGE EMMERSON AND
MARK EMMERSON

TRUSTS – GENERAL
CHARACTER OF GAIN
PARTNERSHIPS; BUSINESS LOSS
Revenue and Taxation Code § 17711, 17752
Feb. 4, 1986
86-SBE- 012 ENGELBRECHT, FREDERICK AND CAROL
STATUTE OF LIMITATIONS
FEDERAL ACTIONS
Revenue and Taxation Code §§ 18451, 18586.2
Feb. 4, 1986
86-SBE- 013 FOOTHILL PUBLISHING CO. AND
THE RECORD LEDGER, INC.

JURISDICTION
ACCOUNTING METHODS
UNITARY BUSINESS – COMBINATION
SALES FACTOR – THROWBACK/THROW BACK
UNITARY BUSINESS – APPORTIONMENT
Revenue and Taxation Code § 25101, 25135
Feb. 4, 1986
86-SBE- 014 GABRIK, MICHAEL T. AND PATRICIA C.
RESIDENCY
DOMICILE – COMMERCIAL/INDIVIDUAL
Revenue and Taxation Code § 17014
Feb. 4, 1986
86-SBE- 015 GABRIK, MICHAEL T. AND PATRICIA C.
PETITION FOR REHEARING
May 6, 1986
86-SBE- 016 GIESEA, FREDERICK A. AND JEAN C.
GENERAL GAIN AND LOSS
BASIS
Feb. 4, 1986
86-SBE- 017 HARDING, ROBERT E.
RESIDENCY
DOMICILE – COMMERCIAL/INDIVIDUAL
Revenue and Taxation Code § 17014
Feb. 4, 1986
86-SBE- 018 HART, DEAN L. AND CAROL R.
PARTNERSHIPS
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
LOAN – RECOURSE/NONRECOURSE
MISCELLANEOUS PENALTIES
Revenue and Taxation Code § 17206
Revenue and Taxation Code § 17561
Feb. 4, 1986
86-SBE- 019

KERSHAW, CHARLES H. AND MARGARET N., AND
JOHN R. AND LOIS E. KERSHAW
DIVIDENDS RECEIVED/DIVIDEND INCOME
BAD DEBT DEDUCTION
ADVANCE PAYMENTS; BUSINESS LOSS
PARTNERHSIPS
LOAN-RECOURSE/NONRECOURSE
Revenue and Taxation Code § 17207
Revenue and Taxation Code § 17915
Revenue and Taxation Code § 17071

Feb. 4, 1986
86-SBE- 020 LA MONTAINE, JOHN
EXEMPT INCOME
EXEMPT INTEREST/DIVIDEND
Feb. 4, 1986
86-SBE- 021 LASH, TERRY R.
NOTICE AND DEMAND PENALTY
LATE FILING PENALTY
REASONABLE CAUSE – PENALTIES
Feb. 4, 1986
86-SBE- 022 MARKETING MANAGEMENT, INC.
UNITARY BUSINESS – APPORTIONMENT
UNITARY BUSINESS – GENERAL
UNITARY BUSINESS – COMBINATION
INSURANCE COMPANIES
Feb. 4, 1986
86-SBE- 023 MAYNARD, LARRY R.
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
Feb. 4, 1986
86-SBE- 024 MCPHERSON, ALAN L. AND CLAIRE
STATUTE OF LIMITATIONS
BUSINESS EXPENSE DEDUCTION
Feb. 4, 1986
86-SBE- 025 MENDOZA, RAFAEL E.
BAD DEBT DEDUCTION
NOTE-AT RISK/RECOURSE/NONRECOURSE/VALUE
BUSINESS LOSS
BUSINESS/NONBUSINESS INCOME
Revenue and Taxation Code § 17207
Feb. 4, 1986
86-SBE- 026 MOLLATH, LINTON AND ELIZABETH
BUSINESS EXPENSE DEDUCTION
COMPENSATION – REASONABLE V. UNREASONABLE
BAD DEBT DEDUCTION
CHARACTER OF GAIN
Revenue and Taxation Code § 17202
Revenue and Taxation Code § 17207
Feb. 4, 1986
86-SBE- 027 MOTOWN RECORD CORPORATION,
JOBETE MUSIC COMPANY, INC., AND
MULTI-MEDIA MANAGEMENT CORPORATION

COMPENSATION – REASONABLE V.UNREASONABLE
Feb. 4, 1986
86-SBE- 028 MOTOWN RECORD CORPORATION,
JOBETE MUSIC COMPANY, INC., AND
MULTI-MEDIA MANAGEMENT CORPORATION

PETITION FOR REHEARING
May 6, 1986
86-SBE- 029 MULTIQUIP, INC.
RESERVE
BAD DEBT
ACCOUNTING METHODS
Revenue and Taxation Code § 24348
Black Motor Co. V. Commissioner (1940) 41 B.TA. 300
Thor Power Tool Co., v. Commissioner, 439 U.S. 522 (1979)
Feb. 4, 1986
86-SBE- 030 NAPP SYSTEMS (USA), INC.
ESTIMATE TAX PENALTY
MINIMUM TAX
REFUND CLAIMS
Revenue and Taxation Code § 26071
Feb. 4, 1986
86-SBE- 031 NORTON, JOHN H. AND MARIE E.
TAX SHELTERS
PARTNERSHIPS
CANCELLATION OF DEBT
TAXABLE INCOME
Feb. 4, 1986
86-SBE- 032 ORR, BERRY J. AND BETH L.
RENTERS CREDIT
RESIDENCY
JOINT RETURNS
Revenue and Taxation Code § 17053.5
Feb. 4, 1986
86-SBE- 033 PACIFIC BRIDGE COMPANY
NOT – AT RISK/RECOURSE/NONRECOURSE VALUE
YEAR OF INCLUSION
ACCOUNTING METHODS
OPTIONS; BUSINESS LOSS
Revenue and Taxation Code § 24684
Feb. 4, 1986
86-SBE- 034 SEEDLOCK, ROBERT F. AND HORTENSE N.
BAD DEBT DEDUCTION
ADVANCE PAYMENTS
CLOSELY HELD CORPORATIONS
NOTE- AT RISK/RECOURSE/NONRECOURSE VALUE
DEDUCTIONS – GENERAL
Revenue and Taxation Code § 17207
Revenue and Taxation Code § 17206
Feb. 4, 1986
86-SBE- 035 STEURER, EARL L. AND EVELYN R.
HOBBY LOSS DEDUCTION
BUSINESS LOSS
Revenue and Taxation Code § 17233
Feb. 4, 1986
86-SBE- 036 STRONG, SCOTT T.
RESIDENCY
DOMICILE – COMMERCIAL/INDIVIDUAL
Feb. 4, 1986
86-SBE- 037 TOUSHIN, CHARLES R.
FEDERAL ACTION
FRANCHISE TAX BOARD – ACTIONS/RULINGS
Revenue and Taxation Code § 18586.2
Feb. 4, 1986
86-SBE- 038 TRAILS END, INC.
PETITION FOR REHEARING
UNITARY BUSINESS – GENERAL
UNITARY BUSINESS – COMBINATION
Feb. 4, 1986
86-SBE- 039 WALKER, GEORGE A.
MOVING EXPENSE DEDUCTION
DEDUCTIONS - GENERAL
Feb. 4, 1986
86-SBE- 040 WARD, GUY AND ALVENA
RETROACTIVE APPLICATION – LAW/DECISIONS
PROSPECTIVE APPLICATION – NEW LAW/DECISIONS
ROLLOVER OF GAIN ON SALE OF PRINCIPAL RESIDENCE
Revenue and Taxation Code § 18091
Feb. 4, 1986
86-SBE- 041 WHISENHUNT, ROBERT C.
REFUND CLAIMS
STATUTE OF LIMITATIONS
FEDERAL ACTION
Revenue and Taxation Code § 19053
Feb. 4, 1986
86-SBE- 042 ANDREINI & COMPANY AND
ASH SLOUGH VINEYARDS, INC.

BUSINESS/NONBUSINESS INCOME
UNITARY BUSINESS – COMBINATION
UNITARY BUSINESS – GENERAL
CLOSELY HELD CORPORATION
INSURANCE COMPANIES
Mar. 4, 1986
86-SBE- 043 BANCAL TRI-STATE CORPORATION
BUSINESS LOSS
UNITARY BUSINESS – COMBINATION
UNITARY BUSINESS – GENERAL
ACCOUNTING METHODS
HOLDING COMPANY
BANKS AND FINANCIAL CORPORATIONS
FRANCHISE TAX BOARD – ACTIONS/RULINGS
PETITION FOR REHEARING
RETROACTIVE APPLICATION – LAW/DECISIONS
Mar. 4, 1986
86-SBE- 044 BERRY ENTERPRISES, INC.
UNITARY BUSINESS – GENERAL
Mar. 4, 1986
86-SBE- 045 BLOMSTERBERG, KENNETH AND SAUNDRA P.
FEDERAL ACTION
STATUTE OF LIMITATIONS
Mar. 4, 1986
86-SBE- 046 BUCKLES, ARNOLD R. AND BESSIE
CORPORATE LIQUIDATIONS
CORPORATION ORGANIZAITON AND REORGANIZATION
DIVIDENDS RECEIVED/DIVIDEND INCOME
RETAINED EARNINGS
LIQUIDATION – REINCORPORAITON; REORGANIZATION
PETITION FOR REHEARING NOT SEPARATELY LISTED
Mar. 4, 1986
86-SBE- 047 COLLINS, WIELAND H. AND JENNIE
HOBBY LOSS
FARM LOSS
Revenue and Taxation Code § 17233
Mar. 4, 1986
86-SBE- 048 CURRY, ROBERT T. AND M. R.
LATE PAYMENT PENALTY
REASONABLE CAUSE – PENALTIES
Revenue and Taxation Code § 18684.2
Mar. 4, 1986
86-SBE- 049 EVERGREEN MARINE CORPORATION (CALIF.) LTD.
UNITARY BUSINESS – COMBINATION
UNITARY BUSINESS – GENERAL
UNITARY BUSINESS – APPORTIONMENT
PAYROLL FACTOR
ACCOUNTING METHODS
UNCONSTITUTIONAL
Revenue and Taxation Code § 25137
Mar. 4, 1986
86-SBE- 050 FARGO RANCH LAND & CATTLE CO.
BUSINESS EXPENSE DEDUCTION
CONSTRUCTIVE RECEIPT
DIVIDENDS RECEIVED/DIVIDEND INCOME
CONSTRUCTIVE DIVIDENDS
Revenue and Taxation Code § 24343
Mar. 4, 1986
86-SBE- 051 FLETCHER, PAUL
NOTE – AT RISK/RECOURSE/NONRECOURSE/VALUE
PARTNERSHIPS
LOAN – RECOURSE/NONRECOURSE
Revenue and Taxation Code § 17599
Mar. 4, 1986
86-SBE- 052 FRENCH, ALAN
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
JEOPARDY ASSESSMENTS
BUSINESS LOSS
NEW ISSUE ON APPEAL
Mar. 4, 1986
86-SBE- 053 GARCIA, ROLAND ARANDA
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
JEOPARDY ASSESSMENT
Mar. 4, 1986
86-SBE- 054 GORDY, BERRY, JR.
RESIDENCY
HEAD OF HOUSEHOLD
Mar. 4, 1986
86-SBE- 055 HAMZAVI, HOSSEIN A.
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
JEOPARDY ASSESSMENT
Mar. 4, 1986
86-SBE- 056 MID-WAY GMC, INC.
BAD DEBT RESERVE
Revenue and Taxation Code § 24348
Black Motor Co. v. Commissioner, 41 B.T.A. 300 (1940), AFFD on other issues, 125 F.2d977 (6th Cir. 1942)
Mar. 4, 1986
86-SBE- 057 MILLER, ROGER D. AND MARY
THEFT LOSS
LATE FILING PENALTY
REASONABLE CAUSE – PENALTIES
Mar. 4, 1986
86-SBE- 058 SEDLACEK, RICHARD R. AND HORTENSE M.
STATUTE OF LIMITATIONS
EXEMPT INTEREST/DIVIDEND
REFUND CLAIMS
EQUITABLE ESTOPPEL
Revenue and Taxation Code § 19053
Mar. 4, 1986
86-SBE- 059 SHALOR, INC.
COMPENSATION – REASONABLE V. UNREASONABLE
YEAR OF INCLUSION
Mar. 4, 1986
86-SBE- 060 TAPLIN, JONATHAN T.
CAPITAL CONTRIBUTION
ADVANCE PAYMENTS
BAD DEBT DEDUCTION
Mar. 4, 1986
86-SBE- 061 TELLES, ROBERT R.
INTEREST EXPENSE/INTEREST OFFSET
PARTNERSHIPS
YEAR OF INCLUSION
Mar. 4, 1986
86-SBE- 062 TROPICANA INN, INC.
UNITARY BUSINESS – COMBINATION
UNITARY BUSINESS – OWNERSHIP
UNITARY BUSINESS – GENERAL
Mar. 4, 1986
86-SBE- 063 TWENTYMAN, JIM W.
DEDUCTIONS – GENERAL
BUSINESS EXPENSE DEDUCTION
RESIDENCY
INCOME AVERAGING
Revenue and Taxation Code § 18243
Mar. 4, 1986
86-SBE- 064 WHEELER, ABNER AND LILLIE M.
BAD DEBT DEDUCTION
YEAR OF INCLUSION
BANKRUPTCY
CHARACTER OF GAIN
GAIN OR LOSS – GENERAL
MISCELLANEOUS LOSS
GAMBLING LOSS
PRIZE
Mar. 4, 1986
86-SBE- 065 ANTLE, ROBERT V. AND SUE
PREFERENCE TAX
TAX BENEFIT RULE
FARM LOSS
EXEMPTION CREDIT
PETITION FOR REHEARING
Apr. 9, 1986
86-SBE- 066 COGSWELL, ESTATE OF ANNA
PREFERENCE TAX
TAX BENEFIT RULE
PETITION FOR REHEARING
Apr. 9, 1986
86-SBE- 067 COLLINS, JAMES A. AND CAROL A.
PREFERENCE TAX
FARM LOSS
ORDINARY V. CAPITAL LOSS
Revenue and Taxation Code § 17064.7
Apr. 9, 1986
86-SBE- 068 DAVIS, MARJORIE LILLIE
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
JEOPARDY ASSESSMENT
Apr. 9, 1986
86-SBE- 069 DESIGN MART, INC.
BAD DEBT RESERVE
Black Motor Co. v. Commissioner, 41 B.T.A. 300 (1940)
Revenue and Taxation Code § 24348
Apr. 9, 1986
86-SBE- 070 FARIA DAIRY, INC.
BUSINESS EXPENSE DEDUCTION
LOAN – RECOURSE/NONRECOURSE
RELATED PARTY TRANSACTIONS
Revenue and Taxation Code § 24343
Apr. 9, 1986
86-SBE- 071 FOX, BASIL K. AND FLOY C.
RESIDENCY
DOMICILE – COMMERCIAL/INDIVIDUAL
Apr. 9, 1986
86-SBE- 072 HAGEN, MAGNUS F. AND DENISE
PREFERENCE TAX
SMALL BUSINESS STOCK
PETITION FOR REHEARING
Revenue and Taxation Code § 17063.11
Revenue and Taxation Code § 18162.5
Apr. 9, 1986
86-SBE- 073 HEALY, JOSEPH J.
TAX BASIS; GROSS INCOME
CHARACTER OF GAIN
GAIN OR LOSS – GENERAL
OPTIONS; EQUITABLE ESTOPPEL
YEAR OF INCLUSION
Revenue and Taxation Code § 17122.7
Apr. 9, 1986
86-SBE- 074 HOLIDAY INNS, INC.
PARTNERSHIPS
INSTALLMENT SALES
TAXABLE INCOME
BUSINESS/NONBUSINESS INCOME
CHARACTER OF GAIN
UNITARY BUSINESS – APPORTIONMENT
Apr. 9, 1986
86-SBE- 075 HOUSE, ANDREW F. AND OPAL M. AND KENNETH G.
AND MARJORIE L. HOUSER

DEFERRAL OF INCOME
LIKEKIND EXCHANGE
NOTE – AT RISK/RECOURSE/NONRECOURSE/VALUE
PETITION FOR REHEARING
Revenue and Taxation Code § 18081
Apr. 9, 1986
86-SBE- 076 JOELSON, MARSHALL D. AND UNA F.
BAD DEBT DEDUCTION
YEAR OF INCLUSION
LOAN-RECOURSE/NONRECOURSE
Revenue and Taxation Code § 17207
Apr. 9, 1986
86-SBE- 077 KAHN, ESTATE OF ALBERT (DEC'D) AND LILLIAN
TAXABLE INCOME; ACCOUNTING METHODS
PREFERENCE TAX
RESIDENCY; ACCRUAL-NONRESIDENCY
OTHER STATE TAX CREDIT
GAIN OR LOSS – GENERAL
GAIN EXCLUSION
Apr. 9, 1986
86-SBE- 078 KRECHMAN, DAVID AND GOLDIE
THEFT LOSS
Revenue and Taxation Code § 17206
Apr. 9, 1986
86-SBE- 079 KURT WILLE ELECTRIC, INC.
BUSINESS EXPENSE DEDUCTION
DIVIDEND RECEIVED/DIVIDEND INCOME
BUSINESS/NONBUSINESS INCOME
CLOSELY HELD CORPORATONS
FARM LOSS; HOBBY LOSS DEDUCTION
CONSTRUCTIVE DIVIDENDS
Apr. 9, 1986
86-SBE- 080 PENFOLD, WILBERT L. AND DORIS
RESIDENCY
DOMICILE – COMMERCIAL/INDIVIDUAL
Apr. 9, 1986
86-SBE- 081 STILES, JOHN R. AND DOROTHY M.
GAIN OR LOSS – GENERAL
INSTALLMENT SALES
REFUND CLAIMS
Apr. 9, 1986
86-SBE- 082 WILLE, KURT AND ELISE
GROSS INCOME
BUSINESS EXPENSE DEDUCTION
DIVIDENDS RECEIVED/DIVIDEND INCOME
CLOSELY HELD CORPORATION
TAXABLE INCOME
CONSTRUCTIVE DIVIDENDS
Apr. 9, 1986
86-SBE- 083 WYBENGA, JACK AND LIAN N.
PARTNERSHIPS
NOTE – AT RISK/RECOURSE/NONRECOURSE/VALUE
BASIS
BUSINESS LOSS
Apr. 9, 1986
86-SBE- 084 ALLEN, JOHN H. AND GERALDINE E.
CASUALTY LOSS
Revenue and Taxation Code § 17206
May 6, 1986
86-SBE- 085 ARNOLD, DENNIS AND CYNTHIA
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
JEOPARDY ASSESSMENT
LATE FILING PENALTY
GROSS INCOME
NEGLIGENCE PENALTY
GAIN OR LOSS – GENERAL
May 6, 1986
86-SBE- 086 BREDERO CALIFORNIA, INC., BREDERO CONSULTING, INC., AND BEST BLOCKS, INC.
UNITARY BUSINESS – COMBINATION
HOLDING COMPANY
UNITARY BUSINESS – INTRASTATE
MINIMUM TAX
NEXUS
UNITARY BUSINESS – GENERAL
May 6, 1986
86-SBE- 087 CHUNG, CONSTANCE Y.
BAD DEBT DEDUCTION
LOAN – ADD GUARANTEE
GIFT
Revenue and Taxation Code § 17207
May 6, 1986
86-SBE- 088 DEXTER, GREG L.
NOTICE AND DEMAND PENALTY
RETURNS
TIMELY MAILING
NEGLIGENCE PENALTY
Revenue and Taxation Code § 18431
May 6, 1986
86-SBE- 089 DREYFUSS DEVELOPMENT CORPORATION
NOTE – AT RISK/RECOURSE/NONRECOURSE/VALUE
May 6, 1986
86-SBE- 090 EMMANUEL N. MBA, M. D., INC.
BUSINESS EXPENSE DEDUCTION
DEPRECIATION/AMORTIZATION
LOAN-RECOURSE/NONRECOURSE
May 6, 1986
86-SBE- 091 FINDLEY, EUGENE C.
NOTICE AND DEMAND PENALTY
REASONABLE CAUSE – PENALTIES
RETURNS
LATE FILING PENALTY
LAST KNOWN ADDRESS RULE
May 6, 1986
86-SBE- 092 GLOVER, LYNN W., JR. AND JUNE R. GLOVER
BUSINESS EXPENSE DEDUCTION
May 6, 1986
86-SBE- 093 JACKSON, GAYLE
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
JEOPARDY ASESSMENTS
GROSS INCOME
May 6, 1986
86-SBE- 094 JACOBO, JESUS aka JESSIE JACABO
ILLEGAL ACTIVITIES
JEOPARDY ASESSMENTS
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
GROSS INCOME
May 6, 1986
86-SBE- 095 LAMOREAUX, NORBERT R. AND JOAN M.
ORDINARY V. CAPITAL LOSS
ORIGINAL ISSUE DISCOUNT (OID)
Revenue and Taxation Code § 18161
May 6, 1986
86-SBE- 096 LEGGIT, DENNIS
ENERGY CONSERVATION TAX CREDIT
CREDIT – ENERGY CONSERVATION
Revenue and Taxation Code § 17052.4
May 6, 1986
86-SBE- 097 MARKUS, ESTATE OF MARION
PARTNERSHIPS
CALIFORNIA SOURCE INCOME
RESIDENCY
GROSS INCOME
DIVIDENDS RECEIVED/DIVIDEND INCOME
STATUTE OF LIMITATIONS
Revenue and Taxation Code § 17952
May 6, 1986
86-SBE- 098 NASSAR, THEODORE R. AND AIDA
FARM LOSS
HOBBY LOSS DEDUCTION
Revenue and Taxation Code § 17233
May 6, 1986
86-SBE- 099 SHERPA, KARLDEN
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
GROSS INCOME
JEOPARDY ASSESSMENTS
May 6, 1986
86-SBE- 100 STEVENS, EDWIN O. AND WANDA L.
RESIDENCY
CALIFORNIA SOURCE INCOME
May 6, 1986
86-SBE- 101 UNITED PARCEL SERVICE, INC.
UNITARY BUSINESS – APPORTIONMENT
PROPERTY FACTOR
PAYROLL FACTOR
SALES FACTOR
May 6, 1986
86-SBE- 102 VOGEL, PHILIP J. AND GENEVIEVE
CHARITABLE CONTRIBUTION DEDUCTION
DEDUCTIONS – GENERAL
ORDINARY V. CAPITAL LOSS
BUSINESS EXPENSE DEDUCTION
INSURANCE COMPANIES
PETITION FOR REHEARING
May 6, 1986
86-SBE- 103 WINGER, RICHARD C. AND DIANE
FARM LOSS
PREFERENCE TAX
PETITION FOR REHEARING
Revenue and Taxation Code § 17062 and 17063
May 6, 1986
86-SBE- 104 ABBOTT, DAVID A.
RESIDENCY
DOMICILE – COMMERCIAL/INDIVIDUAL
June 10, 1986
86-SBE- 105 AMERICAN MEDICAL BUILDINGS, INC.
BUSINESS/NONBUSINESS INCOME
UNITARY BUSINESS – COMBINATION
UNITARY BUSINESS – APPORTIONMENT
June 10, 1986
86-SBE- 106 ARMOUR OIL COMPANY
BUSINESS/NONBUSINESS/INCOME
DOMICILE – COMMERCIAL/INDIVIDUAL
UNITARY BUSINESS – APPORTIONMENT
NOTE – AT RISK/RECOURSE/NONRECOURSE/VALUE
June 10, 1986
86-SBE- 107 BARUCH, KONSTANTYN AND ROSE
BUSINESS EXPENSE DEDUCTION
DEPRECIATION/AMORTIZATION
DEDUCTIONS – GENERAL
CLOSELY HELD CORPORATIONS
GIFTS
June 10, 1986
86-SBE- 108 BOWEN, BERNELL R. AND LAN L.
RESIDENCY
June 10, 1986
86-SBE- 109 BROCKETT, SHELDON I. AND HELEN E.
BURDEN OF PROOF
FEDERAL ACTION
TRUSTS – GENERAL
June 18, 1986
86-SBE- 110 CALLANDER, HARRINGTON, AND BOST, A MEDICAL CORPORATION
BUSINESS EXPENSE
CAPITALIZED EXPENSES
June 10, 1986
86-SBE- 111 CASSADY, RICHARD W.
BASIS
SMALL BUSINESS STOCK
June 10, 1986
86-SBE- 112 FERBAR CORPORATION OF CALIFORNIA, INC.
DEPRECIATION/AMORTIZATION
COVENANT NOT TO COMPETE
June 10, 1986
86-SBE- 113 GLEASON, MARSHALL T. AND ARLENE W.
REFUND CLAIMS
June 10, 1986
86-SBE- 114 HADADY, ROBERT E. AND BETH B.
RELATED PARTY TRANSACTIONS
June 10, 1986
86-SBE- 115 HOME BUDGET LOANS
BAD DEBT
REAL PROPERTY
BAD DEBT RESERVE
June 10, 1986
86-SBE- 116 KOCH, RICHARD E.
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
June 10, 1986
86-SBE- 117 MERCHANTS FURNITURE WAREHOUSE OF LONG BEACH, INC.
BAD DEBT
LOSSES – YEAR SUSTAINED
June 10, 1986
86-SBE- 118 NEEME, EMIL AND MELVENE B.
FEDERAL ACTION
INTEREST – ABATEMENT
NOTICE OF PROPOSED ASSESSMENT (NPA)
June 10, 1986
86-SBE- 119 ROSEGLEN CONSTRUCTION, INC.
FEDERAL ACTION
INSTALLMENT SALES
CANCELATION OF DEBT
BUSINESS EXPENSE
June 10, 1986
86-SBE- 120 ROSS, OMER W. DECEASED
REFUND CLAIMS
June 10, 1986
86-SBE- 121 SPIEGEL, SAM AND BETTY
CALIFORNIA SOURCE INCOME
NONRESIDENT
BURDEN OF PROOF
DUTY DAYS/WORKING DAYS
June 10, 1986
86-SBE- 122 SUNDSTRAND CORPORATION
BUSINESS/NONBUSINESS INCOME
ACCOUNTING METHODS – CHANGE IN PERIOD OR METHOD
June 10, 1986
86-SBE- 123 THOMAS, JOHN ELLIOTT
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
ILLEGAL ACTIVITIES
June 10, 1986
86-SBE- 124 TIMES FURNITURE COMPANY
LOSSES – GENERAL
BAD DEBT RESERVE
BAD DEBT
June 10, 1986
86-SBE- 125 VILLA MARIA MANAGEMENT CORPORATION
INTEREST EXPENSE
COVENANT NOT TO COMPETE
June 10, 1986
86-SBE- 126 WALTERS, WILLIAM L.
BUSINESS EXPENSE
DEDUCTION – BUSINESS EXPENSE
June 10, 1986
86-SBE- 127 WESTLAKE PETROLEUM, INC.
BUSINESS/NONBUSINESS INCOME
INTEREST INCOME
June 10, 1986
86-SBE- 128 WISE, STEPHEN T. AND ELEANOR
CONTRIBUTION TO CAPITAL
LOAN V. CAPITAL CONTRIBUTION
BAD DEBT
June 10, 1986
86-SBE- 129 CASHMAN INVESTMENT CORPORATION
BANKS & FINANCIAL CORPORATIONS
July 29, 1986
86-SBE- 130 CHOW, DAVID
FEDERAL ACTION
FRAUD
PENALTY – FRAUD
July 29, 1986
86-SBE- 131 GALLARDO, ROSA
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
July 29, 1986
86-SBE- 132 HENGELMANN, J. R. AND CLAUDIA
ASSIGNMENT OF INCOME
July 29, 1986
86-SBE- 133 HILTON, HENRY H. AND DIANE A.
CASUALTY LOSS
DEDUCTION – CASUALTY LOSS
July 29, 1986
86-SBE- 134 INTERNATIONAL BAY CLUBS, INC.
LOSSES – GENERAL
SALE V. LEASE
SALE V. FINANCING AGREEMENT
July 29, 1986
86-SBE- 135 JENSEN, LYNN P. AND SANDRA K.
LOAN V. DIVIDEND
CONSTRUCTIVE DIVIDEND
July 29, 1986
86-SBE- 136 J. H. MCKNIGHT RANCH, INC.
CLAIM OF RIGHT DOCTRINE
July 29, 1986
86-SBE- 137 LEVINE, JOHN J. AND ROSEMARY
RESIDENCY
July 29, 1986
86-SBE- 138 MOSS, JULIAN T., JR. AND MARGERY L.
RESIDENCY
DOMICILE - INDIVIDUAL
July 29, 1986
86-SBE- 139 MUELLER, ROBERT AND M. J., ET AL.
FARM LOSS
July 29, 1986
86-SBE- 140 MULLAN, THOMAS V.
CONSTRUCTIVE DIVIDEND
CANCELLATION OF DEBT
July 29, 1986
86-SBE- 141 SALT, HADDON N. AND GRACE
PREFERENCE TAX/INCOME
CAPITAL GAIN/LOSS
July 29, 1986
86-SBE- 142 SHERRIFFE, LOUIE H. AND MURIEL B.
FEDERAL ACTION
July 29, 1986
86-SBE- 143 BEAN, HUBERT R. AND MARY C.
BUSINESS ACTIVITY
HOBBIES
Aug. 20, 1986
86-SBE- 144 BEKKEN, DEAN E. AND MARTHA
VALID TAX RETURN
TAXABLE INCOME
Aug. 20, 1986
86-SBE- 145 ENFIELD, FREDERIC AND MARION
CASUALTY LOSS
DEDUCTION – CASUALTY LOSS
Aug. 20, 1986
86-SBE- 146 GARNER, RUSSELL
JEOPARDY ASSESSMENT
Aug. 20, 1986
86-SBE- 147 GRUBMAN, SEYMOUR AND ARLENE
BAD DEBT
WORTHLESS STOCK LOSS
Aug. 20, 1986
86-SBE- 148 MCCARTHY, RICHARD P. AND MAUREEN
BAD DEBT
CONTRIBUTION TO CAPITAL
WORTHLESS STOCK LOSS
Aug. 20, 1986
86-SBE- 149 MORRIS TUG & BARGE, INC.
BUSINESS LOSS
DEDUCTION – BUSINESS EXPENSE
Aug. 20, 1986
86-SBE- 150 TULIPANI, RUDY L. AND GEORGIA
CHARITABLE CONTRIBUTIONS – CHARITABLE INTENT
CAPITALIZED EXPENSES
BUSINESS EXPENSE
Aug. 20, 1986
86-SBE- 151 WALKER & LEE, INC.
BAD DEBT
Aug. 20, 1986
86-SBE- 152 WATSON, JAMES R. AND CHRYL A.
DEPRECIATION
Aug. 20, 1986
86-SBE- 153 BRIGLIA, DONALD D.
BUSINESS EXPENSE
PARTNERSHIP
DEDUCTIONS – BUSINESS EXPENSE
Sept. 10, 1986
86-SBE-154 CAL-AMERICAN MANAGEMENT
PARTNERSHIPS
ASSIGNMENT OF INCOME
Sept. 10, 1986
86-SBE-155 DAVIS, RICHARD E.
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
Sept. 10, 1986
86-SBE- 156 DUNKOE, GEORGE
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
Sept. 10, 1986
86-SBE- 157 FRASER, GORDON AND JUNE K.
WORTHLESS STOCK LOSS
BAD DEBT
Sept. 10, 1986
86-SBE- 158 LAWTON, PHILIP L. AND MADELEINE G.
DEDUCTION – LEGAL FEES
Sept. 10, 1986
86-SBE- 159 LAWTON, PHILIP L. AND MADELEINE G. June 16, 1987
86-SBE- 160 MEKJIAN, GEORGE AND HELEN S.
GUARANTY/GUARANTEE
PARTNERSHIPS
Sept. 10, 1986
86-SBE- 161 MERIDIAN EXPORT, INC.
BAD DEBT
BUSINESS LOSS
Sept. 10, 1986
86-SBE- 162 NATAN, ESTATE OF AMIR, DECEASED, AND
ESTATE OF ROOHI NATAN, DECEASED
DEDUCTIONS – GENERAL
BURDEN OF PROOF - DEDUCTION
Sept. 10, 1986
86-SBE- 163 NATIONAL DOLLAR STORES, LTD., THE
UNITARY BUSINESS – COMBINATION
BUSINESS/NONBUSINESS INCOME
Sept. 10, 1986
86-SBE- 164 O'HAREN, WILLIAM E.
PARTNERSHIPS
CANCELATION OF DEBT
Sept. 10, 1986
86-SBE- 165 PULIZZI, JEFFREY PAUL
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
Sept. 10, 1986
86-SBE- 166 RODSON, HOWARD PAUL
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
Sept. 10, 1986
86-SBE- 167 SAM ELLIS STORE, INC.
BAD DEBT RESERVE
Sept. 10, 1986
86-SBE- 168 SCOTT, WILLIAM C. AND SANDRA M.
SHAM TRANSACTION
BUSINESS ACTIVITY
Sept. 10, 1986
86-SBE- 169 SILVERTON, RONALD R. AND FAWN, SILVERTON,
RONALD R., AND SILVERTON, RONALD R. AND HILDA
DEDUCTION – LEGAL FEES
FEDERAL ACTION
STATUTE OF LIMITATIONS – ASSESSMENTS
Sept. 10, 1986
86-SBE- 170 SIMCAL CHEMICAL COMPANY
TAX BENEFIT RULE
INTEREST INCOME
UNITARY BUSINESS – APPORTIONMENT
Sept. 10, 1986
86-SBE- 171 SPECIALTY RESTAURANTS CORPORATION
UNITARY BUSINESS – COMBINATION
MINIMUM TAX
BAD DEBT RESERVE
YEAR OF INCLUSION
Sept. 10, 1986
86-SBE- 172 BEROLZHEIMER, PHILIP C. AND ANNE
LATE PAYMENT PENALTY
PENALTY – LATE PAYMENT
REASONABLE CAUSE – PENALTY ABATEMENT
Nov. 19, 1986
86-SBE- 173 B.M.S. MARINE, INC.
BUSINESS EXPENSE
DEDUCTION – BUSINESS EXPENSE
COMPENSATION – REASONABLE V. UNREASONABLE
Nov. 19, 1986
86-SBE- 174 BURKLEO, HOMER V., ET AL.
PARTNERSHIPS
PASSIVE ACTIVITY
BUSINESS ACTIVITY
Nov. 19, 1986
86-SBE- 175 CENTRAL FEDERAL SAVINGS AND LOAN ASSOCIATION OF SAN DIEGO
ACCOUNTING METHODS – CHANGE IN PERIOD OR METHOD
SAVINGS AND LOAN ASSOCIATION
Nov. 19, 1986
86-SBE- 176 CIRCLE METALS
BAD DEBT
BUSINESS EXPENSE
DEDUCTION – BAD DEBT
Nov. 19, 1986
86-SBE- 177 CLAYDON, CLIFFORD
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
Nov. 19, 1986
86-SBE- 178 COUNTRY CLUB CLEANERS
COVENANT NOT TO COMPETE
INSTALLMENT SALES
Nov. 19, 1986
86-SBE- 179 CROCKER NATIONAL CORPORATION
PROPERTY FACTOR
SALES FACTOR
TANGIBLE PERSONAL PROPERTY
Nov. 19, 1986
86-SBE- 180 DASIBI ENVIRONMENTAL CORPORATION
UNITARY BUSINESS – COMBINATION
STATUTE OF LIMITATIONS – ASSESSMENTS
COMBINED REPORT
Nov. 19, 1986
86-SBE- 181 DAY, KENNETH G. AND NADINE E. AND JOHN A.
AND DARLENE DONALDSON

CORPORATE LIQUIDATIONS
GAIN OR LOSS - GENERAL
Nov. 19, 1986
86-SBE- 182 EDWARDS, WALDRIP C., JR.
BUSINESS ACTIVITY
BUSINESS EXPENSE
HOBBIES
Nov. 19, 1986
86-SBE- 183 GALARDO, MICHAEL J. AND MARIA
CONSTRUCTIVE DIVIDEND
LOAN V. DIVIDEND
CONTRIBUTION TO CAPITAL
Nov. 19, 1986
86-SBE- 184 HENDERSON, DEAN R.
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
Nov. 19, 1986
86-SBE- 185 HILL AND DALE LAND COMPANY
UNITARY BUSINESS - COMBINATION
Nov. 19, 1986
86-SBE- 186 HORWICH, JEFFREY S.
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
Nov. 19, 1986
86-SBE- 187 JERNBERG, FOLKE, ET AL.
ESTATES
NONRESIDENT
Nov. 19, 1986
86-SBE- 188 LENNANE, JAMES P.
DEPRECIATION
PREFERENCE TAX/INCOME
Nov. 19, 1986
86-SBE- 189 PHOTO-MARKER CORPORATION OF CALIFORNIA
UNITARY BUSINESS – COMBINATION
PAYROLL FACTOR
Nov. 19, 1986
86-SBE- 190 PORTER, OAKLEY W. AND FERN A.
FARM LOSS
Nov. 19, 1986
86-SBE- 191 RENSHAW, CHARLES C. AND ELYNOR W.
APPEAL PROCEDURE
LACHES
BUSINESS ACTIVITY
HOBBIES
Nov. 19, 1986
86-SBE- 192 RICHARD A. GARCIA, INC., TAXPAYER, AND
RICHARD A. GARCIA, ASSUMERAND/OR TRANSFEREE

INSTALLMENT SALES
CORPORATION ORGANIZATION & REORGANIZATIONS
Nov. 19, 1986
86-SBE- 193 SARRAUTE, RAUL E.
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
Nov. 19, 1986
86-SBE- 194 SIGNAL COMPANIES, INC.
UNITARY BUSINESS – GENERAL
NET INCOME - COMPUTATION
Nov. 19, 1986
86-SBE- 195 SIGNAL COMPANIES, INC.
BASIS
FEDERAL ACTION
Nov. 19, 1986
86-SBE- 196 SINTON, SILAS J. AND LAURIE
FARM LOSS
Nov. 19, 1986
86-SBE- 197 VIDAL SASSOON, INC.
LATE FILING PENALTY
PENALTY-LATE FILING
REASONABLE CAUSE – PENALTY ABATEMENT
Nov. 19, 1986
86-SBE- 198 YOUNG'S MARKET COMPANY
INCOME V. RETURN OF CAPITAL
STATUTE OF LIMITATIONS – REFUNDS
Nov. 19, 1986
86-SBE- 199 YOUNG, JOHN R.
RESIDENCY
DOMICILE - INDIVIDUAL
Nov. 19, 1986
86-SBE- 200 ARELLANO, SALUD C.
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
Dec.3, 1986
86-SBE- 201 DELAHUNTE, MARIE
INTEREST INCOME
EXEMPT INCOME
Dec.3, 1986
86-SBE- 202 ENSIGN CLUB
REAL PROPERTY
TAX – EXEMPT ORGANIZATION
Dec.3, 1986
86-SBE- 203 FOOTE, BRUCE A.
ILLEGAL ACTIVITIES
INCOME – ESTIMATED BY FRANCHISE TAX BOARD
Dec.3, 1986
86-SBE- 204 MARK CONTROLS CORPORATION
BUSINESS / NONBUSINESS INCOME
FUNCTIONAL/TRANSACTIONAL TESTS
Dec.3, 1986
86-SBE- 205 Decision Unavailable
86-SBE-206 WAYNO, JEROME W. AND RITA ANN
BUSINESS EXPENSE
DEDUCTION – BUSINESS EXPENSE
DEDUCTION – LEGAL FEES
Dec.3, 1986
86-SBE-207 MORGAN, JOE AND GLORIA, XXXV-280A Jan. 6, 1986
86-SBE- 208 W. K. EQUIPMENT COMPANY, XXXV-417A Feb. 4, 1986
86-SBE- 209 RIETZ, CHARLES R., XXXV-84A Jan. 6, 1986