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acknowledged; that is, car racing at any level is an expensive
proposition.7 Lastly, giving little weight to petitioner’s offer
to sell the Mustang at prices that increased based upon the
accomplishments achieved, we have serious doubts whether the
value of the Mustang would ever exceed the cumulative losses
incurred by petitioners over the history of Turtle Performance.
It follows that respondent’s adjustments disallowing the net loss
claimed on the Schedule C for Turtle Performance for each year in
issue are sustained.
Petitioners’ 1994 return also includes a Schedule C
reporting income earned and expenses incurred by their minor
child. Respondent determined that neither the income nor the
expenses are properly reported on petitioners’ joint return. We
agree. In general, amounts received in respect of services
rendered by a child are includable in the child’s income and not
in the income of the child’s parents. Sec. 73(a). Furthermore,
expenditures attributable to such income are generally treated as
paid or incurred by the child. Sec. 73(b). Respondent’s
adjustments in this regard are therefore sustained.
Taking into account successive extensions, petitioners’ 1995
joint Federal income tax return was due on or before October 15,
7 The late Colin Chapman, founder and guiding force of Lotus
Cars, Ltd., is rumored to have said that he made a small fortune
from automobile racing. The problem, according to Mr. Chapman,
was that when he started racing he had a large fortune.
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