- 20 - Tax Reporting LFI On a Schedule F, Farm Income and Expenses, attached to petitioners’ 1987 Federal income tax return Form 1040, petitioners represented that Granot Loma was a Christmas tree farm and claimed a depreciation deduction of $163,781 with respect to personal property with a book value of $1 million and improvements with a book value of $2,255,000. On LFI’s Forms 1120S for 1988 through 1992, LFI reported the following income, expenses, and net operating losses: 1988 1989 1990 1991 1992 Income: Lodging -0- $16,290 $233,285$154,373 $124,148 Tree removal 8,135 Auction 305,567 Less: Refunds (1,414) Other income 2,936 6,024 3,000 Total income -0- 25,947 544,876154,373 127,148 Expenses: Salaries & wages $284,437144,996 89,15380,192 33,908 Repairs 14,225 30,771 12,758 Bad debts 9,958 Rents 2,000 2,856 Taxes 71,134 139,29758,494 80,155 Depreciation 307,422 379,204 363,126314,419 275,043 Employee benefits 11,084 21,732 6,839 Other expenses 375,147 301,289 403,580 239,342 176,417 Total expenses 967,006 921,932 997,156754,908 587,976 Net income or (loss)(967,006)(895,985) (452,280)(600,535)(460,828) BAC On BAC’s Forms 1120S for 1988 through 1992, BAC reported the following income, expenses, and net operating losses:Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Next
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