- 13 - 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.Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
Last modified: May 25, 2011