Courtney C. Haun and Rebecca F. Haun - Page 8

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          corporation losses in Schedules E of petitioners' 1995 and 1996             
          returns.                                                                    
               Petitioners reported the following amounts of wage income in           
          their returns for 1991 through 1996:                                        
                         Year           Wage Income                                   
                         1991           $71,659                                       
                         1992           72,345                                        
                         1993           84,565                                        
                         1994           84,167                                        
                         1995           99,366                                        
                         1996             107,030                                     
                         Total          519,132                                       
               The following income, expenses, and losses from the roping             
          horse activity were reported in petitioners' returns for the                
          years 1991 through 1994 and in Rafter H's returns for the years             
          1995 and 1996:                                                              
             Year            Income      Expenses        Losses                       
             1991            -0-         $19,915      $19,915                         
             1992            $600        35,108       34,508                          
             1993            1,000       45,344       44,344                          
             1994            -0-         29,712       29,712                          
             1995            901         26,949       26,048                          
             1996            -0-         24,705        24,705                         
             Totals          2,501       181,733      179,232                         
                                                                                     
               Respondent determined in the notice of deficiency (notice)             
          that petitioners are not entitled to the expenses with respect to           
          the roping horse activity in the amounts of $35,108 and $45,344             
          that they claimed in Schedules C of their 1992 and 1993 returns,            
          respectively.2                                                              

               2  The parties stipulated that if the Court were to                    
          determine that petitioners engaged in the roping horse activity             
                                                             (continued...)           




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