- 13 -
Income from Income Adjusted
Interest Capital from Gross
Year Income Gains Gambling Income
1983 $344 - - $6,825
1984 229 - - 6,420
1985 379 $7,897 - 16,817
1986 922 - - 922
1987 1,040 - - 1,040
1988 1,438 - - 1,438
1989 2,847 3,421 $1,002 7,270
1990 3,316 - 2,452 12,971
They also reported total Social Security benefits received for
1989 and 1990 of $5,591 and $6,257, respectively, none of it
taxable.
Frank and Katherine’s returns for the years in issue were
prepared by their accountant, Jack Baptiste (Baptiste). He
prepared the returns on the basis of information they furnished
to him.
2. Larry’s Returns
Larry and Nancy filed joint Federal individual income tax
returns for each of the years in issue. For 1983 through 1986,
Larry and Nancy claimed exemptions for themselves and for three
dependent children living with them (Sylvia, Tony, and David).
For 1987 through 1990, they claimed exemptions for themselves and
for two dependent children living with them (Tony and David).
Katherine trained Nancy to read palms. Larry and Nancy
filed Schedules C with their returns for the years in issue
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