Ruth N. Nelson - Page 20




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          income and expenses of BRVC.  While petitioner's record-keeping             
          procedures may not have been as meticulous as might be desired,             
          they were sufficient to keep an accurate account of BRVC income             
          and expenses.                                                               
               The record reflects that petitioner expended great effort to           
          advertise and promote the camps, clinics, and membership programs           
          for tournament play conducted through BRVC.  Indeed, an activity            
          such as BRVC is not likely to generate gross income in excess of            
          $40,000 for 5 or more successive years8 without a concerted                 
          effort at promotion.  Additionally, through BRVC, petitioner                
          endeavored to develop and market a volleyball shoe, the Ruth                
          Nelson Sideout, in collaboration with Aspri shoe company.                   
          Following the bankruptcy of Aspri, petitioner's move to Iowa, a             
          series of health problems, and her beginning realization that               
          camps, clinics, and membership programs were no longer going to             
          provide potential profits for BRVC, petitioner began to focus the           
          activities of BRVC in the direction of consulting services.                 
          Later, during the mid-1990's petitioner attempted another                   
          transformation of the activities of BRVC by entering into the               
          prepaid telephone card promotion industry.  It is clear that                
          petitioner developed a pattern of changing the activities of BRVC           

               8    Although the record contains no Federal income tax                
          return information for years prior to 1986, the record indicates            
          that BRVC generated gross income of approximately $50,000 for               
          each of the years 1984 and 1985.                                            






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