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At the time of trial (November 1999), petitioners anticipated
that for 1999, they would once again incur a loss from their
Amway activity.
Petitioners determined their net losses from their Amway
activity on Schedule C of their tax returns for 1991 through
1998 as follows:
1991 1992 1993 1994
Gross income1 $ 2,796 $11,387 $19,691 $ 5,609
Less: expenses
(incl. home office) 13,054 39,113 39,396 33,016
Net loss $10,258 $27,726 $19,705 $27,407
1995 1996 1997 1998
Gross income1 $12,524 $17,129 $ 7,302 $ 7,584
Less: expenses
(incl. home office) 46,063 44,916 29,527 26,691
Net loss $33,539 $27,787 $22,225 $19,107
1For petitioners, gross income was essentially the
bonuses earned from the sale (or personal consumption)
of Amway products by “downline” distributors.
Petitioners themselves sold relatively few Amway
products, although they did order such products
on behalf of “downline” distributors.
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