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Item Amount
Real estate taxes $5,519
Home mortgage interest 25,200
Personal interest
($944 less nondeductible portion) 614
Cash contribution 70
Total itemized deductions claimed 31,403
Consequently, for the taxable year 1987, petitioner and Ms.
Murphy reported negative taxable income in the amount of $16,214
and total tax due of zero. None of the activity of Pieces of
Eight, except as noted above, was reported on the 1987 return.
The face of the 1987 return is date-stamped received at the
Internal Revenue Service Atlanta Service Center on October 24,
1988. Included with the 1987 return is a Form 4368, Application
for Automatic Extension of Time to File U.S. Individual Income
Tax Return, and a Form 2688, Application for Additional Extension
of Time to File, both of which were signed by the return
preparer, Mr. Louwers. The Form 2688 requested an extension
until October 15, 1988, to file the 1987 return and represented
that petitioner and Ms. Murphy needed the extension because they
were "awaiting K-1 from Subchapter S corporation". The form
further indicates that approval for the extension was granted.
Petitioner filed no Federal individual income tax return for
taxable years 1988 or 1989. Petitioner, however, was aware of
his obligation to file returns. For those years, Ms. Murphy
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