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purported losses from Jasmak for 1994 through 1997. The items of
income from Jasmak were the only items of income reported on
petitioner’s 1997 through 1999 returns. Petitioner filed his
1997 tax return with the Commissioner on March 26, 1999.
The respective returns reported that petitioner calculated
Jasmak’s profit (loss) for 1997 through 1999 as follows:
1997 1998 1999
Gross receipts $233,394 $407,173 $356,977
Returns and allowances -0- (7,846) -0-
Cost of goods sold:
Beginning inventory 72,411 56,270 81,431
Purchases 114,367 279,762 220,877
Ending inventory 56,270 81,431 83,236
130,508 254,101 219,072
Gross profit 102,886 144,226 137,905
Expenses:
Advertising 7,212 2,206 4,394
Commissions and fees 19,460 23,562 24,348
Insurance 3,428 4,785 6,097
Interest -0- 529 -0-
Legal and prof. services 2,678 9,167 7,971
Office expense -0- -0- 1,782
Rent 36,000 36,000 36,000
Repairs and maintenance 5,152 2,446 1,686
Supplies 1,648 1,049 -0-
Taxes and licenses 197 2,985 2,338
Travel 795 150 1,143
Utilities 2,750 1,200 1,200
Bank charges 425 991 929
Depreciation 4,565 8,058 8,058
Dues and subscriptions 82 182 215
Freight 1,274 94 106
Janitorial 320 355 1,070
Medical/health -0- 1,760 -0-
Miscellaneous expenses 110 839 272
Postage 301 517 674
Salary expense 11,000 20,200 22,000
Security 422 433 428
Telephone 6,342 7,581 8,245
Transportation 3,435 2,028 3,061
Sales tax 3,118 -0- 3,226
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