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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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