- 6 -
quick profit" by selling the condominium; however, in the event
it could not be sold quickly, it would be rented out in order to
realize a return. Petitioner estimated the value of the
condominium at the time of purchase to be $22,000. It was
advertised for a sale price of $31,500; however, no lease price
was set out in the advertisements. One potential lessee was
quoted a rental fee of $375 per month, plus $58.10 for the
monthly condominium maintenance fee, plus utilities. The record
is not clear whether the property was ever rented out. The
record is clear, however, that it was not rented during 1991, nor
was the property ever sold.
On their 1991 Federal income tax return, petitioners
reported on Schedule C, Profit or Loss from Business, income of
zero, and a net loss of $24,613 consisting of the following
expenses:
Advertising $ 1,035
Car and truck expenses 1,035
Commissions and fees 1,138
Insurance (other than health) 56
Legal and professional services 5,540
Office expense 663
Repairs and maintenance 497
Supplies 4,152
Taxes and licenses 3,769
Travel, meals and entertainment
Travel 3,232
Meals and entertainment 2,586
(after the 20% limitation)
Utilities 910
Total expenses $24,613
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