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Total income Sch. E IRA Investment
Year before Sch. E loss loss contribution credit
1983 $44,139 $10,090 $1,650 $3,225
1984 48,350 30,270 1,600
1985 53,611 34,306 2,400
1986 54,167 36,324 2,400
The Schedule E, Supplemental Income Schedule, losses were the
losses attributable to SGE that were allocated to petitioner and
Mr. Capehart on the Forms K-1, Partner’s Share of Income,
Credits, Deductions, etc., received from the Hoyt organization.
The IRA contributions represented amounts allegedly contributed
to IRAs established for petitioner and Mr. Capehart. The
investment tax credit claimed for 1983 was allocated to
petitioner and Mr. Capehart by the Hoyt organization with respect
to their investment in SGE.
The Hoyt organization prepared petitioner and Mr. Capehart’s
1983 through 1986 returns and the Form 1045.6 Before signing
each return, Mr. Capehart gave it to petitioner, and, together,
they reviewed it for accuracy by comparing the figures reported
on the return to the records they had submitted to the Hoyt
organization. Neither petitioner nor Mr. Capehart understood how
the Hoyt organization had arrived at some of the figures reported
6Before petitioner and Mr. Capehart invested in the Hoyt
partnerships, a certified public accountant had prepared their
returns. Petitioner began to prepare their Federal income tax
returns, at some point that is not indicated in the record, when
she and Mr. Capehart no longer relied on the Hoyt organization to
do so.
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Last modified: May 25, 2011