- 3 - Net Operating Loss Petitioner filed a wrongful termination suit against a former employer in 1984, claiming lost wages and benefits of $209,367 based upon his attorney's calculations. The lawsuit was settled for $27,500, which petitioners correctly reported as taxable income in the year received. In 1987, petitioners began deducting, as an NOL, the difference between $209,367 and $27,500. Petitioners have never included in taxable income, nor been subject to tax on, the amounts which they are deducting as an NOL ($29,506 in 1991 and $26,880 in 1992). Trade or Business During the late 1970's, petitioner formed the Presto Co., a sole proprietorship which involved various musical activities. Petitioners reported gross receipts on their Schedules C for tax years through 1985 consisting of income from teaching piano lessons, piano sales, and piano tuning and repair. In 1985, petitioners' Schedule C showed gross receipts of $448 from piano lessons; petitioner ceased teaching piano lessons in that year. Petitioners reported no gross receipts from music activities on their Schedules C for 1986, 1987, 1988, 1989, 1990, and 1992 tax years. (Gross receipts shown on petitioners' Schedule C for 1991 in the amount of $650 consisted of income from consultingPage: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011