Fredie Lynn Charlton - Page 6

                                         -6-                                          
          1950's and were rented until 1988 or 1989.                                  
               Petitioners began to rehabilitate the cabins in the fall of            
          1994.  Charlton spent time in 1994 working on the cabins and                
          other aspects of the Charlton Pointe property.  Petitioners                 
          incurred expenses for travel to Charlton Pointe and expenses to             
          rehabilitate the cabins.  However, petitioners rented no cabins             
          at Charlton Pointe in 1994.  Charlton began renting the cabins in           
          1998.                                                                       
          D.   Petitioners’ Income Tax Returns                                        
               Charlton used tax return preparation software to prepare               
          returns for petitioners for 5 years, including 1994.                        
               Petitioners filed a joint income tax return for 1994.  On              
          it, they reported profits and losses on Schedules C, Profit or              
          Loss From Business, for Medi-Task and the cabins.  Charlton used            
          the gross revenue amounts from the lists Hawthorne prepared to              
          prepare the return.  He did not review the bank statements.  He             
          also used the lists that Hawthorne prepared to report Medi-Task’s           
          expenses.  He decided how to report the expenses on part II of              
          Schedule C for Medi-Task; e.g., as advertising, legal and                   
          professional services, travel and meals, utilities, wages, and              
          other expenses.                                                             
               Petitioners reported that the Medi-Task income was divided             
          equally between themselves for self-employment tax purposes.                
               Petitioners reported that Charlton had $62,135 in wages for            






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  Next

Last modified: May 25, 2011