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(International) in partnership with Mrs. Joyner (Joyner). Joyner
was petitioner-husband's English teacher in the United States.
Petitioner-husband and Joyner formed International to sell
costume jewelry that they imported from Brazil. Petitioners did
not attach a Schedule C (Profit or Loss From Business (Sole
Proprietorship)) for International to their 1987 and 1988
returns.
In 1989, Joyner transferred her interest in International to
petitioner-wife. The record does not show how much petitioners
invested in the partnership or how much they paid Joyner for her
interest. In 1989, petitioner-husband bought silver jewelry for
International to sell in the United States. He attended trade
shows in San Antonio and other places to try to sell merchandise.
Petitioner-husband began to work full-time for International
in 1990. International's sales of jewelry were poor, and the
company lost money in 1990 and 1991. In 1990 and 1991,
International was a sole proprietorship. Petitioners attached a
Schedule C for International to their 1990 and 1991 returns.
International began to export electronic components to
Brazil in 1990. Petitioner-husband continued to export
electronic components to Brazil in 1991 and stopped importing
jewelry from Brazil. His export sales grew in 1991 and 1992.
International had gross receipts of $64,910 in 1990, $201,992 in
1991, about $400,000 in 1992, and about $1.3 million in 1993.
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