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petitioner, she relied on Mr. Abelein because she felt he had
more business sense than she did.
Tax Returns
Petitioner and Mr. Abelein filed joint Federal income tax
returns for 1982, 1983, 1984, 1985, and 1986. On or about May,
28, 1986, petitioner and Mr. Abelein filed Form 1045, Application
for Tentative Refund, on which they carried back an investment
credit from DGE and applied it to their 1982, 1983, and 1984
taxable years. Petitioner and Mr. Abelein received refunds of
$4,871, $4,573, and $3,229 for 1982, 1983, and 1984,
respectively. As a result, petitioner and Mr. Abelein paid no
income taxes for those years.
On their Federal income tax returns for 1982-86, petitioner
and Mr. Abelein reported the following:
Total income Sch. E IRA Investment
Year before Sch. E loss loss contribution credit
1982 $42,903 -- -- --
1983 45,416 -- -- --
1984 38,725 -- -- --
1985 41,146 $24,216 -- $9
1986 44,013 20,180 $2,000 62
The Schedule E, Supplemental Income Schedule, losses were the
losses attributable to DGE that were allocated to petitioner and
Mr. Abelein on the Schedules K-1 they received from the Hoyt
organization. The IRA contribution represented an amount
allegedly contributed to an IRA established for petitioner and
Mr. Abelein.
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