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an economic investment. Petitioner never saw the subscription
agreement or either of the assumption agreements or any other
documents, including the Memorandum, relating to the Stonehurst
investment, either prior to Mr. Heitzman’s purchasing the
interest or at any time thereafter. Mr. Heitzman kept the
Stonehurst documents at his office and signed the subscription
and assumption agreements there without ever bringing them home.
4. The 1979 Joint Income Tax Return
In each of the taxable years from 1973 to 1981, including
1979, petitioner and Mr. Heitzman filed joint Federal income tax
returns that were prepared by a prominent accounting firm,
Alexander Grant, Inc. (Alexander Grant). Each year, when Mr.
Heitzman asked, petitioner would give him her Forms W-2,
receipts, and other information pertaining to her employment. He
would then pass that information to their accountant at Alexander
Grant, along with the other information required to complete the
return. For taxable year 1979, Mr. Heitzman helped petitioner
determine the expenses for her modeling activities by going
through the checkbook and other receipts.
Petitioner’s 1979 gross income amounted to $3,700, derived
entirely from residuals from a television commercial. Petitioner
had $3,058 in total deductions, including agency fees and
modeling expenses, that were attributable directly to her
business activities that year. Her net contribution to taxable
income shown on the return was $642.
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