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1986 1987 1988 1989 1990 1991
Storage,
warehousing -- (1,200) -- -- -- --
Supplies purchased-- -- (3,500)(1,045) (162) --
Veterinary fees,
(85) (1,658) (1,347)(504) -- (507)
medicine
Other expenses -- (516) (5,450)(1,975) (874) (550)
Total expenses (3,411)(10,201)(23,756)(12,663) (6,781)(6,448)
Net income (loss)(3,411)(10,201)(23,681)(11,788)(1,132) (3,178)
Petitioners reported the losses in 1986 and 1988 on
Schedules F attached to their joint income tax returns.
Mr. Perry reported the losses in 1987, 1989, 1990, and
1991 on Schedules F attached to his individual income tax
returns. We note that Mr. Perry's return reports gross
income of $3,270 for 1991, whereas the stipulation of facts
filed by the parties states that petitioner received only
$3,200 of gross income in that year. The record does not
disclose the reason for this discrepancy, and we accept the
figure stated in petitioner's return. The additional $70
which is not explained in the stipulation is listed as
"unexplained income" in the above schedule. Mr. Perry
reported net losses from his horse breeding and boarding
activity in 1992 and 1993 of $1,720 and $517, respectively,
and a net profit of $1,274 in 1994.
Respondent began the examination of petitioners' tax
returns sometime in or around 1988. On December 19, 1989,
petitioners filed with respondent Form 5213, Election to
Postpone Determination as to Whether the Presumption That
an Activity is Engaged in for Profit Applies, for an
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