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losses from a condominium in Hawaii and from Whitman and another
partnership) as follows:
1982 1984
$146,879 $187,674
Petitioners’ investment portfolio included a variety of
interests, including several tax-oriented investments.
Petitioners maintained a brokerage account with Merrill Lynch.
They invested in a company called Shaman, a clothing import
company that distributed merchandise through stores in the
Seattle metropolitan area. They conducted a Schedule C business
involving lithographic prints.3 In addition to petitioners’
investments specifically listed in the record, Kirk Clothier
(Clothier), petitioners’ accountant, testified that he had joined
together with them in “several” investments. Petitioner alluded
to investments prior to Whitman when he testified that in
3Petitioners reported their lithographic print business on a
Schedule C, Profit or Loss From Business or Profession (Schedule
C). On the Schedule C, petitioners indicated: The name of their
business was “WAYNE D. BERRY ARTS”, the main business activity
was “ART WORKS”, and the product was “LITHOGRAPHIC PRINTS”. At
trial, petitioner briefly summarized the business as an
arrangement in which he “purchased the rights to the marketing
profits generated from the sale of the * * * [lithographic
prints].” On each of the two tax returns of petitioners in the
record, 1982 and 1984, petitioners reported zero gross income
from the business.
Although the record is incomplete regarding petitioners’
lithographic print business, we note that lithographic prints are
a familiar tax-sheltering device. See, e.g., Rose v.
Commissioner, 88 T.C. 386 (1987), affd. 868 F.2d 851 (6th Cir.
1989); Bronson v. Commissioner, T.C. Memo. 1993-233; Gangel v.
Commissioner, T.C. Memo. 1991-358; Ballard v. Commissioner, T.C.
Memo. 1988-436.
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