Ralph Louis Vitale, Jr. - Page 12




                                        -12-                                          
          Neal Sperling, a Hollywood script agent, requesting that he                 
          submit a plot summary of his book for consideration as a made-              
          for-television movie or feature film.  Petitioner is presently a            
          member of Washington Independent Writers, The Authors Guild,                
          Poets and Writers, and Writers Market Book Club.  During the                
          years in issue, petitioner spent approximately 25-35 hours per              
          week on his writing activity.                                               
               Apart from that activity, petitioner reported the following            
          income on his Federal income tax returns:                                   
          1993             1994                                                       
          Wages                       $53,076          $54,243                        
          Dividend income               6,111            4,847                        
          State/local tax refund          174              999                        
          Capital gain (loss)          (3,000)          (3,000)                       
          Total                   56,361           57,089                             
               In 1993, petitioner began treating his writing activity as a           
          trade or business.  From that year on, he began filing a Schedule           
          C (Profit or Loss From Business), in which he listed his princi-            
          pal business or profession as author.  As of the date of trial,             
          petitioner's writing activity had not resulted in a profit for              
          any year, as reflected in the following table:                              
          Year          Net Loss                                                      
          1993          $15,190                                                       
          1994           23,517                                                       
          1995            9,177                                                       
          1996            8,183                                                       








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