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Michael Van Heemst reflecting the income of Pieces of Eight.
Petitioner provided Mr. Louwers with the information concerning
Pieces of Eight that was used for purposes of preparing financial
statements and tax returns.
For taxable year 1987, petitioner filed a joint Federal
individual income tax return (1987 return) with Ms. Murphy.3 On
the 1987 return, petitioner and Ms. Murphy reported income from
the sources and in the amounts shown below:
Source Amount
Form W-2 wages (Ms. Murphy) $10,000
Form W-2 wages (petitioner) 10,000
Taxable interest income 478
Nonpassive income from S corporation
(Pieces of Eight Dive Center, Inc.) 411
Total income reported per return 20,889
The Forms W-2 for both petitioner and Ms. Murphy indicate as
employer "Kathleen Murphy, Pieces of Eight, PO Box 1124, Captiva,
Fl 33924".
Petitioner and Ms. Murphy claimed one personal exemption for
each of themselves and a dependency exemption for petitioner's
17-year-old son, Jason, who lived with them. Additionally, they
claimed itemized deductions on Schedule A in the amounts shown
below:
3
The notice of deficiency for 1987 was issued to both
petitioner and Ms. Murphy. She did not file a petition with
respect to that notice and, accordingly, is not a party to the
instant case.
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