Free Memorandum - District Court of Federal Claims - federal

Case 1:05-cv-00296-FMA

Document 64-14

Filed 12/20/2006

Page 1 of 1

COMPARISON OF REPORTING ­ Colony vs. Grapevine Imports, Ltd. Reporting of Transactions In Colony
Corporate Income Tax Return Overstatement of basis · Attachment to Schedule A shows purchase price minus sale price to arrive at "Profit on Lot Sales"

Reporting of Transactions In Grapevine
Individual Income Tax Return ­ Form 1040 Alleged overstatement of basis (Sale of partnership interests) · Schedule D, Part II, shows years of purchase and sale, sales price, basis, and loss from sale of Grapevine partnership interest; lists Grapevine by name ·

Schedule D, Part II and attachment reflect T-Tech's longterm capital gain on sale of its 1% partnership interest

Short-term capital loss on short sales · Schedule D, Part I, shows flow-through loss of $81,774 which matches loss figure on partnership return; shows name and EIN of Grapevine partnership · Schedule B shows interest and dividends received on opening of short sales; numbers match those listed in Forms 1099 Partnership Return ­ Form 1065 Capital contributions of short sales · Schedule M-2, Line 2 shows capital contributions including proceeds from short sales of $10,044,172 · Schedules K-1, Lines J(b) for each partner show capital contributions including proceeds from short sales Closing of short sales · Schedule K, Line 4(d) shows $21,884 loss and references attached schedule · Attachment to Schedule K shows purchase and sale of "U.S. Treasury Notes"; computes short-term loss; $9,978,119 figure is combined short sale proceeds from Forms 1099; loss of $21,884 is carried over to Schedule K · Schedules K-1 reflect partners' proportionate share of loss from short sales

Additional Disclosure Present Here But Not in Colony

Capital distributions and sale of partnership · Schedule L, Balance Sheet per Books, shows zero balance at end of year · Schedule M-2, Line 9, shows zero balance at end of year · Schedules K-1 for each partner show 0% partnership interest at end of year, zero balance in capital accounts, and that this was the final K-1 for each partner · Capital accounts tie back to basis reported on Tigues' Form 1040, Schedule D S-Corporation Tax Return ­ Form 1120S Share of loss from short sales · Schedule K, Line 4(d) shows short-term capital loss of $218 and references attached schedule · Attachment to Schedule K shows name of partnership and EIN; shows amount of loss · Schedule K-1 for Joseph Tigue allocates to him 100% of short-term loss Sale of partnership · Schedule K, Line 4(e) shows long-term capital gain and references attached schedule Forms 1099 · Describe "short sale" of U.S. Treasury Notes by name; show date of opening of short sales; combined short sale proceeds of $9,978,119 ($4,989,059.50 each) ties to Form 1065 Schedule K Attachment; interest and dividends are reported on Form 1040, Schedule B Forms SS-4 · Show social security numbers of taxpayers, EINs of limited liability companies, and LLCs' election of disregarded entity status

Plaintiffs' Exhibit 75