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September 18, 1995, Michael transferred $8,000 from one of his
proprietorship’s bank accounts to the trust’s bank account.
Michael, as the proprietor of Rancho, used equipment under lease
to the trust.
Carey 1995 Return
For 1995, the Careys made a joint return of Federal income
tax on Form 1040, U.S. Individual Income Tax Return (the Carey
1995 return). That return shows the Careys’ address as 3041
Lawrence Rd, Redding, California. Attached to the Carey 1995
return is a Schedule C, Profit or Loss From Business (Sole
Proprietorship) (the Carey Schedule C). The Carey Schedule C
reports Michael’s income and expenses with respect to Sunshine
and Rancho. The income and expenses are reported under the cash
receipts and disbursements method of accounting. The Carey
Schedule C reports gross receipts, expenses, and net profits from
the operation of Sunshine and Rancho as follows:
Gross receipts $524,734
Expenses:
Car/truck expense $15,366
Depreciation 31,029
Employee benefits 220
Mortgage interest 9,200
Other interest 210
Legal/prof. services 5,342
Property rental 27,814
Supplies 6,092
Taxes/licenses 18,910
Travel expense 228
Meals (50%) 1,278
Utilities 8,790
Wages 204,621
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Last modified: May 25, 2011