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The paralegal business for Schedule C-1 was operated out of
an office owned by petitioner's husband. The office was located
in her husband's house. Petitioner did not pay rent to her
husband or to a landlord for the use of the office. The office
had a fax machine, a computer, shelves for supplies, a telephone,
a printer, and similar items. Petitioner paid for her own
supplies. The paralegal business for Schedule C-2 was operated
out of the Legal Assistance Center.
In 1991, petitioner maintained a checking account with Union
Bank. She also maintained an account with Wells Fargo Bank under
the name "Legal Assistance Center". Petitioner testified that
all earnings from her Schedule C-1 paralegal business were
deposited into the Union Bank account, and that all earnings from
her Schedule C-2 paralegal business were deposited into the Wells
Fargo bank account. The parties stipulated that the total gross
receipts from petitioner's Schedule C-1 paralegal business in the
Union Bank checking account were $29,056 in 1991. (The $258
difference between this amount and the $29,314 reported on the
Schedule C-1 was due to a mistake.)
On her Schedule E, Supplemental Income and Loss, petitioner
reported "rent income" of $6,720 from "residential" property in
San Diego, and "rent income" of $1,600 from "equipment and
furniture", for a total of $8,320. On the Schedule E, petitioner
also deducted expenses of $200 for cleaning, $100 for insurance,
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