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During 1993, 1994, and 1995, petitioners paid cost of goods
sold for Mr. Owens’ painting business totaling $24,121, $64,514,
and $91,607, respectively.
During 1993, 1994, and 1995, petitioners paid business
expenses for the painting business, excluding amounts paid for
Schedule C car and truck expenses, totaling $29,710, $34,023, and
$71,453, respectively.
During 1993, 1994, and 1995, petitioners incurred $2,466.62,
$7,355.11, and $9,718.11, respectively, for parts, repairs, and
purchases for their vans and truck. During each of those years,
petitioners also incurred expenses for gasoline for those vehi-
cles.
Petitioners received insurance proceeds during 1994 and 1995
in the amounts of $4,300 and $4,700, respectively, as reimburse-
ments for certain of Mr. Owens’ tools that he had used in his
painting business and that had been stolen in prior years.
Petitioners had deducted the cost of those stolen tools on
returns that they had filed prior to 1994 and 1995.
During the years at issue, petitioners owned rental property
located in Toledo (Toledo rental property), which constituted
another source of income to them during those years. Petition-
ers’ mortgage with respect to the Toledo rental property was held
by Mid American National Bank, and they also had a second mort-
gage on that property with Northriver Development Corporation.
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