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claimed an exemption for herself and no exemptions for
dependents. For 1988, she filed as “head of household” and
claimed an exemption for herself and an exemption for a dependent
child (Nicole Johnson). Sylvia and Jack Miller filed joint
Federal individual income tax returns for 1989 and 1990. They
claimed exemptions for themselves and an exemption for a
dependent child (Katherine N. Johnson).
For 1987 through 1990, Sylvia reported the following
income, expenses, and net profit from her palmistry business
on Schedules C:
Gross Business Net
Year Receipts Deductions Income
1987 $10,450 $5,540 $4,910
1988 12,350 5,650 6,700
1989 19,710 8,597 111,113
1990 24,510 12,804 11,706
1The face of the Form 1040 shows business income from
Schedule C of $11,531. No explanation is given for the
discrepancy.
On the Schedules C, Sylvia claimed rent expenses of $1,200 for
1987 through 1989 and $2,880 for 1990. Frank and Katherine did
not report any rental income on their Federal individual income
tax returns for 1987 through 1990. On the Schedules C, Sylvia
claimed advertising expenses of $3,990 for 1987, $4,100 for 1988,
$5,900 for 1989, and $5,950 for 1990.
On the returns for 1987 through 1990, Sylvia, or Sylvia and
Jack Miller, reported the following interest income, Schedule E
loss, income from gambling, and adjusted gross income:
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