Greta Ann Clifton - Page 9

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          Orad so Orad could open a bank account and that the $1,000                  
          payment she received from Orad was repayment of her 50-percent              
          share of the Cena contribution.  Since the parties agree that               
          petitioner and Daro were partners in Cena and Cena did contribute           
          $2,000 to Orad, we find that Orad's payment to Daro was a mere              
          reimbursement, not a partnership distribution.  In addition, we             
          find that this transaction supports respondent's position that              
          petitioner and Daro were not co-proprietors of Orad, since Daro             
          never made a capital contribution to Orad.                                  
               Petitioner's own testimony also indicates the lack of a co-            
          proprietor relationship.  Petitioner testified that she                     
          "controlled the Orad account," and that she "got the Orad money."           
               Based on the foregoing, we find that petitioner has failed             
          to carry her burden of establishing that Orad was a partnership             
          for the year at issue.  Accordingly, we sustain respondent's                
          Issue 2. Schedule C Deductions                                              
               Respondent determined that petitioner was not entitled to              
          deduct a number of claimed Schedule C expenses.  Petitioner                 
          asserts that such expenses are allowable.                                   

          4  Although we sustain respondent's determination that Orad was             
          not a partnership, we find that petitioner had $9,236 of                    
          unreported Schedule C gross receipts from Orad, not $9,710 as               
          alleged by respondent.  The $9,236 represents one half of Orad's            
          gross receipts ($18,471).  Petitioner already included the                  
          remaining $9,235 in her 1985 Federal income tax return.                     

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