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attributable to his equipment rental activity. The depreciation
detail schedule listed nine pieces of equipment (one computer,
two trucks, three tractors, and three trailers) that generated
the $15,317 depreciation expense reported. According to the 1992
individual return (and prior years’ returns), the computer was
placed in service on May 19, 1986; the trucks and tractors were
placed in service on June 1, 1986; and the trailers were placed
in service on July 9, 1986. The equipment was depreciated under
the Accelerated Cost Recovery System, over a 5-year period, using
the straight-line method, with a half-year convention (except for
the computer), beginning on the date each asset was placed in
service.
1993 Individual and Fiduciary Income Tax Returns
By reason of Mr. Binder’s illness, petitioner obtained an
extension of time to file his 1993 individual income tax return
(1993 individual return). Petitioner did not file his 1993
individual return until after the extended due date.
Instead of filing Form 1040 for 1993, petitioner filed Form
1040EZ, Income Tax Return for Single Filers With No Dependents,
reporting no taxable income. Mr. Binder had advised petitioner
to report all his business and investment activities on Form
1041, U.S. Fiduciary Income Tax Return (1993 fiduciary return),
under the name and taxpayer identification number of the living
trust. As a result, the 1993 fiduciary return reported
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