Austin L. Mitchell and Rebecca A. Mitchell - Page 6




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          D.   Petitioner’s Law and Accounting Practice                               
               During the years in issue, petitioner worked 2,600 to 2,900            
          hours per year in his office on his legal and accounting                    
          practices.  He worked 1,600 to 1,900 of those hours from October            
          to April.  He worked many additional hours outside of the office            
          doing legal research and reading professional publications.                 
          Petitioner represents clients before the Internal Revenue Service           
          in his law and accounting practices and is familiar with section            
          183 and its regulations.                                                    
               Petitioner does not have a separate checking account for his           
          law practice.                                                               
          E.   Petitioners’ Tax Returns                                               
               Petitioners reported on Schedules F, Profit or Loss From               
          Farming, attached to their tax returns for 1995, 1996, and 1997,            
          that they operated a livestock/hay farm.  Petitioners reported              
          the following amounts of nonfarm income on their income tax                 
          returns filed for 1995, 1996, and 1997:                                     
               Year      Wages      Schedule C Income    Nonfarm Income               
               1995     $47,450    $12,132            $69,704                         
               1996      50,914         7,745             69,258                      
               1997      54,010         5,908             71,050                      













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