- 11 -
joint ownership agreement, on the Federal and State income tax
returns which Birnie prepared for herself and her sister, Birnie
reported one-half of all investment income as being hers and one-
half as being Elizabeth's.
Birnie and Elizabeth maintained an office in their home from
which they conducted their investment activities. Birnie
reported one-half of the allowable deductions with respect to
such office on her own Federal income tax returns and one-half on
Elizabeth's Federal income tax returns. After 1965, the Federal
and State income tax returns of Birnie and Elizabeth were
prepared by Corrine Childs, C.P.A., a licensed attorney, tax
adviser, and tax return preparer. Birnie and Elizabeth informed
Ms. Childs of their joint ownership agreement and of the manner
in which they had been reporting their income, deductions, gains,
and losses with respect to their investments. On the returns
which Ms. Childs subsequently prepared for Birnie and Elizabeth,
income, deductions, gains, and losses with respect to investments
were reported one-half on the return of Birnie and one-half on
the return of Elizabeth.
Throughout the period of their agreement, Birnie and
Elizabeth filed their Federal and State income tax returns
reporting their wage earnings separately and sharing equally in
the profits and losses resulting from their various investments.
Several of the Federal income tax returns filed by Birnie and
Elizabeth during the period 1965 through 1979 were audited. Upon
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011