Wilbur Kenneth Griesmer - Page 5

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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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