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Petitioner has practiced medicine as a surgeon in Arizona
since 1967. His medical practice requires between 50 and 60
hours of his time each week. During the 12-year period ending
with 1992, petitioner's average wage income from his medical
practice was $266,507. Similarly, during the taxable years at
issue, petitioner's average wage income from his medical practice
was $299,687. Petitioner has always relied on a professional
accountant to manage the books and records of his medical
practice.
During the years 1972 through 1986, petitioner was a partner
in M.L. Leasing, a partnership engaged in the leasing of various
types of goods. In 1987, this partnership was dissolved and
petitioner began operating M.L. Leasing as a sole proprietorship.
Petitioner continued to operate M.L. Leasing as such through at
least March 1994. M.L. Leasing's books and records were managed
by a professional bookkeeping service. During taxable years 1983
through 1992, petitioner reported the following profits and
losses from his interest in M.L. Leasing:3
Year Profit (Loss)
1983 $7,270
1984 1,280
1985 7,565
1986 (2,000)
1987 9,283
1988 4,429
3Until 1987, M.L. Leasing was a partnership. Accordingly,
the amounts reflected for years prior to 1987 indicate
petitioner's share of partnership profit and losses.
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