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During 1995 and 1996, petitioner sold six or seven of his
direct ignition systems for use in experimental aircraft for
approximately $1,900 to $3,000 each.
In December of 1996, petitioner obtained from the City of
Reno, Nevada, a general business license relating to his airplane
activity.
Also in 1996, petitioner leased property in Reno, Nevada, on
which petitioner constructed a 7,000-square foot hangar to be
used as a place to build and work on his airplanes.
In 1998, petitioner retired from American.
On a Schedule C, Profit or Loss From Business, filed with
petitioners’ joint Federal income tax returns for 1989 through
1999 that were prepared by an accountant, petitioners reported
gross income, ordinary business expenses, and net losses relating
to petitioner’s airplane activity, and unrelated wage and taxable
pension and annuity income as follows:
Unrelated
Airplane Activity Wages,
Pensions,
Year Gross Income Expenses Net (Loss) & Annuities
1989 $ 3,048 $ 83,216 ($ 80,168) $ 169,433
1990 7,119 45,000 (37,881) 166,643
1991 4,944 49,930 (44,986) 186,683
1992 1,596 78,367 (76,771) 180,683
1993 9,942 112,549 (102,607) 188,829
1994 2,002 80,899 (78,897) 182,590
1995 3,810 76,826 (73,016) 183,415
1996 10,390 76,277 (65,887) 185,770
1997 22,545 82,673 (60,128) 206,506
1998 23,773 103,889 (80,116) 110,844
1999 5,402 88,713 (83,311) 202,559
TOTAL $94,571 $878,339 ($783,768) $1,963,955
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Last modified: May 25, 2011