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petitioner reported as income for 1986. Petitioner reported
taxable income of $2,058 and a tax of $0.
On petitioner’s Form 1040, Schedule C, for 1987, petitioner
listed his principal business or profession as “Real Estate
Development”. He reported no income from gross receipts or
sales, reported $138,653 as “Other income * * * Fees, int, &
Sales”, and claimed deductions of $94,434. See appendix A.
Petitioner reported a net profit from his real estate development
business of $44,219 on his Form 1040. This was the only amount
petitioner reported as income for 1987. Petitioner reported
taxable income of $37,879 and a tax of $7,515.
On petitioner’s Form 1040, Schedule C, for 1988, petitioner
listed his principal business or profession as “Developer/Real
Estate”. Petitioner reported $61,921 as income from gross
receipts or sales, reported no “Other income”, and claimed
deductions of $43,713. See appendix A. Petitioner reported a
net profit from his real estate development business of $18,208
on his Form 1040. This was the only amount petitioner reported
as income for 1988.8 Petitioner reported taxable income of
$5,206 and a tax of $784.
In 1985, petitioner purchased a ring, earrings, and two
necklaces for Ms. Allen as a gift. Those items cost $14,540,
8Petitioner claimed an S corporation loss from Frank’s
Corner, Inc., of $4,702 in 1988.
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