Curtis R. and Lynn Bitker - Page 14

                                       - 14 -                                         
               Jerry & Coleen Bitker           12/31/96       12/31/97                
               Capital gain or loss            $473,015       $89,312                 
               Exemptions                         5,100         1,060                 
               Itemized deductions                6,770         2,535                 
               K-1 Ray Bitker & Sons (C)         40,302        22,031                 
               K-1 Ray Bitker & Sons (J)         60,453        33,047                 
               Schedule E rental               (101,597)      (25,000)                
               Schedule F Coleen                 (1,032)           –                  
               Schedule F Jerry                  36,545        33,770                 
               SE AGI adjustment                 (2,542)       (4,511)                
               Self-employ health                (2,241)       (1,953)                
               Standard deduction               (6,700)       –                       
               Total adjustments                508,073      150,291                  
               The explanations attached to the notices of deficiency state           
          that the income from the Bitker partnership should be increased             
          and “We have adjusted your return in accordance with the                    
          partnership return, which has also been examined.”3    The                  
          adjustments to Schedules F were explained as “Expenses were                 
          deducted on Schedule F that were attributable to the rental                 
          activity.  These expenses are allowed on Schedule E.”  The                  
          adjustments to the Schedule E rental expenses were determined to be         
          “Rental expenses, which you deducted elsewhere, are allowed as              
          rental expenses.  Losses are limited due to passive loss rules.”            
               The explanations attached to the notices of deficiency state           
          that adjustments were made with respect to capital gain or loss             
          because “Amounts distributed by partnership, which are in excess of         


               3    The examination report showing adjustments resulting from         
          the examination of the Bitker partnership returns was not attached          
          to the notices of deficiency.  The notices of deficiency do not             
          otherwise show or explain the adjustments made to the partnership           
          returns.                                                                    





Page:  Previous  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  Next

Last modified: May 25, 2011