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program at UDC, petitioner had no research responsibilities
requiring additional time commitments to the school.
From 1985 through 1994, petitioner reported interest income
from loans. He made or purchased notes representing 75 loans in
amounts varying from $1,600 to $175,000.
Beginning in 1976, petitioner also engaged in purchasing
residential real estate for leasing and for resale.
Petitioner used an enclosed deck off his master bedroom as
an office for his professorial, loan, and real estate activities.
The office had a desk, a home telephone extension, a copy
machine, a computer, and miscellaneous items.
Petitioner's Money-Lending Activity
Petitioner reported income from lending money beginning in
1985. For each of the years 1992 and 1994, petitioner filed a
Federal income tax return to which he attached a Schedule C,
Profit or Loss From Business, reporting interest income from his
loan activity of $20,691 and $4,215 respectively. For 1993,
petitioner received interest income from the notes he was holding
in the total amount of $42,597. Petitioner, however, offset
against his interest income an amount claimed for bad debts of
$776,525 to arrive at a net bad debt loss of $733,928 reported on
Schedule C. After adding the loss to claimed business expenses
of $28,103, petitioner reported on Schedule C a net loss from
business of $762,031 for 1993.
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