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loss. This Schedule E loss was entirely attributable to
petitioner and Mr. Ellison’s investment in the Hoyt partnerships.
The total tax listed was zero. The Federal income tax withheld
listed was $16,872. The Tax Office of W.J. Hoyt Sons Management
Co. was listed as the return preparer on the 1985 return.
Mr. Ellison reviewed his joint return for 1985. He noted
that the deduction related to the Hoyt partnerships was large
compared with his income. Petitioner did not review her joint
returns for 1985 or 1986.
On their joint income tax return for 1986, petitioner and
Mr. Ellison reported $33,274 in wages. In arriving at total
income, the only additions and subtractions were $1,689 in
interest income, $74 in taxable refunds of State and local taxes,
a $20 other loss (related to the sale or exchange of a trailer),
$2,973 in taxable unemployment compensation, and a $14,598
Schedule E loss. Most of the Schedule E loss was attributable to
petitioner and Mr. Ellison’s investment in the Hoyt partnerships.
The total tax listed was zero. The Federal income tax withheld
listed was $7,932. The Tax Office of W.J. Hoyt Sons Management
Co. was listed as the return preparer on the 1986 return.
The Schedules K-1, Partner’s Share of Income, Credits,
Deductions, etc., issued by the Hoyt partnerships to petitioner
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