- 15 -
Income
from Income Adjusted
Interest Sch. E Capital from Misc. Gross
Year Income Loss Gains Gambling Income Income
1983 $392 - - $25,000 - $32,124
1984 647 ($81) - - - 8,675
1985 639 (201) - 10,000 - 19,205
1986 428 (1,709) - - - 8,614
1987 144 (1,242) - - - 8,773
1988 52 (2,234) - - - 11,954
1989 2,059 (3,418) - - - 19,154
1990 2,770 1(7,704) $2,608 - $215 19,046
1$2,130 of the Schedule E loss for 1990 was from Johnson’s Limousine
Service, Inc.
3. Ronnie’s Returns
Ronnie and Linda filed joint Federal individual income tax
returns for 1985 through 1990. Ronnie and Linda claimed
exemptions for themselves and no exemptions for dependents on
those returns. The 1985 return was the first tax return Ronnie
filed.
Ronnie and Linda filed Schedules C with their returns
reporting income from a palmistry business.8 The Schedules C
reported the following gross receipts, expenses, and net income
from the palmistry business:
8 The Schedule C for 1985 listed Ronnie as the proprietor
of the palmistry business, and the Schedule SE identified Ronnie
as the self-employed person. The Schedules C for 1986 through
1990 listed Ronnie and Linda as the proprietors, and they filed
separate Schedules SE for each of those years on which the
Schedule C income was divided equally between Ronnie and Linda.
No business name was given for the palmistry business on any of
the Schedules C. Ronnie did not testify at trial.
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