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with Abraham in the amount of $39,969. In addition, on a
Schedule C she reported $3,453 in gross receipts from her other
businesses. After various deductions she reported taxable income
of $8,193 for the year 1986.
Her 1987 Federal income tax return was apparently timely
filed. For that year she reported $39,847 in salary from her
employment with Abraham, and on a Schedule C, $8,743 in gross
receipts from her other businesses. After various deductions she
reported taxable income of $18,617 for the year 1987.
As best we can tell from the record, there was nothing on
Lawrence's returns that indicated that she was indebted to
Abraham during the years 1986 and 1987.
B. Joseph and Margaret Abraham
On a Schedule C included with the Abrahams' 1987 Federal
income tax return, Abraham reported gross receipts in the amount
of $1,344,364 from his law practice. Although there is some
information with respect to specific expenses deducted on the
Schedule C, the record does not reveal whether petitioners
reported a net profit or loss from Abraham's practice of law. We
are unsure as to the extent, nature, or source of other income
that might have been reported on their return. It appears that
the Abrahams elected to itemize deductions for the year 1987. On
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