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T.O.E. Co."7 Petitioner reported gross income and claimed
expenses and net losses on his Schedules C as follows:
1995 1996
Gross income $1,383 $209
Less: expenses
Office expense 305 ---
Supplies 56 2,106
Salvage from salvagers 83,994 64,035
Net loss 82,972 65,932
Petitioner did not derive any gross income from the sale of
meteorites or pyrite in 1995 or 1996. Rather, the gross income
that he reported on his Schedules C represented interest from
bank accounts that may have been maintained in the name of The
T.O.E. Co.
Petitioner also attached to his income tax return for 1995 a
Schedule D (Capital Gains and Losses). On his Schedule D,
petitioner claimed a net capital loss in the amount of $2,864.
Petitioner used the net losses claimed on his Schedules C
for 1995 and 1996, as well as the net capital loss claimed on his
Schedule D for 1995, to completely offset his reported income
from other sources, such as interest, dividends, and pension and
IRA distributions. Thus, petitioner reported adjusted gross
income for 1995 and 1996 in the amounts of negative $52,949 and
7 "T.O.E." is short for "Treasures on Earth".
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Last modified: May 25, 2011