Gerald L. and Erma L. Dunnegan - Page 5




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          activities included processing the orders of other wholesalers or           
          retailers.                                                                  
               Mrs. Dunnegan worked 30 to 45 hours per week for Auto Plaza            
          performing accounting, preparing title work, and preparing sales            
          tax reports.  She also spent about 25 to 40 hours per week on               
          activities related to the fireworks businesses, except between              
          May and July when she worked 50 hours or more per week in the               
          fireworks businesses.  Mrs. Dunnegan’s duties that were related             
          to the fireworks activities were conducted in her home and                  
          consisted of accounting and bookkeeping services, determining the           
          orders for the following year, placing the overseas orders,                 
          helping to pack the orders, and monitoring shipments.                       
          Mrs. Dunnegan performed 100 percent of the bookkeeping for the              
          Moriarty store.                                                             
               The fireworks businesses are operated as sole                          
          proprietorships, and the income and expense for each location is            
          reported on a Schedule C, Profit or Loss From Business.  On                 
          petitioners’ Schedules C for 1993, both Mr. and Mrs. Dunnegan are           
          listed as the proprietors of the Moriarty, Dennings, and Kansas             
          City fireworks businesses.  Petitioners attributed 50 percent of            
          the net profit and loss from these fireworks businesses to                  
          Mrs. Dunnegan.                                                              
               J&G Enterprise is a sole proprietorship of Mr. Dunnegan that           
          engages in the sale of fireworks.  The income and expenses of the           






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Last modified: May 25, 2011