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indefinite period of time. Mr. Bell anticipated that it would
take a minimum of 18 to 24 months to structure accounting and
administrative departments and have them running smoothly enough
that petitioner’s full-time presence and participation would no
longer be required.
During 1994, 1995, and 1996, petitioner worked for Bellmark
in Los Angeles 287, 281, and 282 days, respectively. He was paid
$97,200 for his Los Angeles work during 1994; however, he did not
receive the agreed upon compensation for 1995 or 1996. Moreover,
petitioner was not reimbursed by Bellmark for any expenses
incurred in the years at issue. Nevertheless, petitioner
continued to devote the majority of his time to Bellmark in the
hopes of eventually receiving such moneys.3
On their joint Federal income tax return for 1994,
petitioners included a Schedule C, Profit or Loss From Business
(Schedule C), in connection with petitioner’s financial and tax
consultant business. That Schedule C included the following
income and expenses:
3 The principal reason why petitioner was not compensated
and reimbursed was that some of the recordings of Bellmark
contained the musical talents of several artists, and each of
those artists was entitled to royalties, an element which was
apparently not anticipated by Mr. Bell or petitioner and that
apparently heavily drained Bellmark’s resources.
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