Virginia A. Fox, et al. - Page 4




                                        - 4 -                                         
               During the subject years, Oxyfresh paid to petitioners                 
          commission income of $191,510 and $225,658, respectively, that              
          they earned as to their distributorship activity.  Oxyfresh                 
          issued to the Prindle Trust 1994 and 1995 Forms 1099-MISC,                  
          Miscellaneous Income, reflecting these amounts.  Petitioners did            
          not report any commission income on their 1994 Federal income tax           
          return.                                                                     
               Oxyfresh also paid to petitioners during 1994 dividends of             
          $1,580.  Oxyfresh issued a 1994 Form 1099-DIV, Dividends and                
          Distributions, to the Prindle Trust reflecting this amount.                 
          Petitioners did not report any dividend income on their 1994                
          Federal income tax return.                                                  
               During the subject years, Mr. Fox received Social Security             
          benefits of $4,802 and $8,460, respectively.  During 1995,                  
          petitioners received interest income of $138, and Mr. Fox                   
          received $26,638 from his military retirement pension.  During              
          1995, petitioners realized gross rental income on various                   
          properties that they rented.                                                
               Respondent determined in the notices of deficiency that                
          petitioners realized the following taxable income during the                
          subject years:3                                                             


               3 Respondent determined in the notices of deficiency for               
          1995 that community income was taxable to petitioners in a total            
          amount greater than 100 percent.  A Rule 155 computation will be            
          necessary to tax each spouse on only 50 percent of that income.             





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