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During 1990 through 1996, petitioners claimed the following
income, expenses, and losses relating to Dr. DeMattia's
sponsorship of Constant's golf career:
Year Income Expense Loss
1990 $0 $14,507 $14,507
1991 0 45,316 45,316
1992 0 51,461 51,461
1993 1,113 69,160 68,047
1994 561 48,267 47,706
1995 0 25,728 25,728
1996 0 12,891 12,891
Total 1,674 267,330 265,656
The claimed expenses for each year include Constant's personal
living expenses such as rent, food, nongolf related
transportation and clothing, and entertainment. The claimed
expenses also include Dr. DeMattia's travel expenses for trips to
Florida and varied tournament locations.
Dr. DeMattia maintained a crude record of expenses relating
to petitioners' sponsorship agreements. He maintained a series
of envelopes in which he stored receipts; for example, hotel
bills were placed in the "hotel bill envelope". At the end of
each year, Dr. DeMattia would prepare a summary based on those
receipts and the summaries were in turn used by his accountant to
prepare petitioners' Federal income tax returns. Dr. DeMattia
did not maintain a separate bank account for the golf sponsorship
activities, nor did he maintain records of tournament entries or
prize money availability.
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