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time. She received medical attention for her illness until the
middle of 1997.
Petitioners’ 1994 and 1996 joint Federal income tax returns
were timely filed. Taking into account extensions, their 1995
joint Federal income tax return was due on or before October 15,
1996, but it was not filed until March 25, 1997. Each return
includes a Schedule C for Turtle Performance. The following
items are reported on the Schedules C:
Year 1994 1995 1996
Income $15,294 $22,505 $18,060
Total expense (59,739) (73,079) (56,727)
deductions
Net profit (44,445) (50,574) (38,667)
or (loss)
The income for 1994 is attributable to leasing fees charged for
the use of petitioners’ tow vehicle and trailer. For the most
part, the incomes reported for 1995 and 1996 consist of travel
expense reimbursements petitioner received from Nichols Research.
Some of the travel expense deductions claimed on the Schedules C
involve those trips when an open-road racing event coincided with
petitioner’s travel obligations as an employee of Nichols
Research.
On Schedules C included with their Federal income tax
returns from 1992, the year that Turtle Performance was
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