- 7 - As Amway distributors, petitioners were entitled to purchase for their personal use Amway products at distributor’s cost without the customary 30-percent markup. In 1994, 1995, and 1996, petitioners purchased Amway products valued at $2,133, $3,282, and $3,786, respectively, for their personal use. Since inception, petitioners have treated their Amway activity as a proprietorship on Schedule C, Profit or Loss From Business, of their Federal income tax return. Petitioners describe their activity on Schedule C as “product distribution” but do not identify the activity as an Amway distributorship. Petitioners have never succeeded in earning a profit from their Amway activity. Rather, petitioners have consistently claimed losses from their Amway activity and have used such losses to offset their other income, principally salary (or net profit from business consulting) from their full-time positions. The following schedule reflects the losses claimed by petitioners from their Amway activity on Schedule C of their tax returns for 1991 through 1998: Year Net Loss 1991 (part year) $ 10,258 1992 27,726 1993 19,705 1994 27,407 1995 33,539 1996 27,787 1997 22,225 1998 19,107 $187,754Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011