B. Albert and Betty M. Holowinski - Page 5

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          prepared profit and loss statements for the years subsequent to             
          those before the Court.                                                     
               Mrs. Holowinski summarized the antique glassware sales                 
          activity as follows:                                                        
               Very few people know that we deal in antiques.  There's                
               no sign at the house -- first of all, because of where                 
               we live, we couldn't have a business.                                  
                    So * * * [the business is] very low-keyed, we keep                
               a low profile, and it's only through the mail or when                  
               we go on these conventions * * *.                                      
               On their 1992, 1993, and 1994 Federal income tax returns,              
          petitioners reported losses from the antique glassware sales                
          activity in the amounts of $9,504, $12,734, and 11,664,                     
          respectively.  In summary, the losses were computed as follows:             
                                         1992       1993      1994                    
          Sales                         $264      $1,583    $2,253                    
          Cost of Goods Sold              170        973     1,453                    
          Gross Profit                  94        610       800                       
               Commissions and fees2    63        165       110                       
               Car, truck & travel      7,391     10,626    9,665                     
               All other expenses       2,144      2,553     2,689                    
          Net Loss                 (9,504)   (12,734)  (11,664)                       
               In the notice of deficiency respondent determined that                 
          petitioners were not entitled to deductions for the net losses              
          listed above because their antique glassware sales activity was             

          2   The commission expenses are listed in the amounts reported on           
          petitioners' tax returns for the years in issue.  We recognize              
          that these numbers do not square with the reported sales figures            
          and the formula provided by petitioners for computing commissions           
          on showcase sales.  We speculate that petitioners may have sold             
          some items and incurred commissions at auctions and at antique              
          conventions they attended.                                                  

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