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signed that return as a fiduciary. In that return, C E Shirley
Trust reported as an item of gross income the $63,481 deducted by
Caralan Trust on account of Caralan Trust’s distribution of
income to it. In that return, C E Shirley Trust reported that it
was in the business of “Computer Consulting”. It reported no
gross income from that business and claimed a loss of $62,686.
It claimed various other small deductions, including a deduction
of $236 for income distributed to Congo Trust, and it showed a
net loss for the year of $100. It also showed $647 as Congo
Trust’s share of depreciation computed by C E Shirley Trust.
Congo Trust
Congo Trust is a trust created by the C. Shirleys. Congo
Trust was created on July 1, 1995.
For 1995, Curtis E. Shirley made a return of Federal income
tax for Congo Trust on Form 1041, U.S. Income Tax Return for
Estates and Trusts (the Congo Trust 1995 return). He signed that
return as a fiduciary. In that return, Congo Trust reported a
real estate rental activity, with receipts (rent) of $12,000 and
deductions of $23,101, giving rise to a loss of $11,101. That
real estate rental activity was the principal residence of the
C. Shirleys. Taking into account a $236 income distribution
received from C E Shirley Trust, a deduction of $600 for a
charitable contribution, and a $100 exemption, Congo Trust
reported a net loss of $11,565. The Congo Trust 1995 return also
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