Kamil F. and Nagwa Gowni - Page 15

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          station to Sembler in 1998.  The Gownis were limited to                     
          recognizing $3,000 of this loss in 1998.  The Gownis identified             
          Mina of Forest City, Mina of Sanford, Shenody, and Bishoy as                
          S corporations on this return.  Bradshaw prepared the Gownis’               
          1998 return.                                                                
               On their joint income tax return for 1999, the Gownis                  
          reported the following sources of income and loss:                          
                          Source               Amount of Income (Loss)                
            Wages                                       $39,475                       
            Taxable interest                                827                       
            Long-term capital loss carryover            (42,000)                      
            Mina of Sanford                             (10,023)                      
            Shenody                                      (6,325)                      
            Bishoy                                        2,647                       
          The Gownis reported taxable income of zero for 1999.  The Gownis            
          were limited to recognizing $3,000 of their reported $42,000                
          long-term capital loss carryover in 1999.  The Gownis identified            
          Mina of Sanford, Shenody, and Bishoy as S corporations on this              
          return.  Bradshaw prepared the Gownis’ 1999 return.                         
               The Gownis requested an extension to file their 1999 return.           
          Their first request extended the time to file to August 15, 2000.           
          Their second request extended the time to file to October 15,               
          2000.  On Form 4868, Application for Automatic Extension of Time            
          to File U.S. Individual Income Tax Return, the Gownis estimated             
          that their total tax liability for 1999 was zero.  The Gownis’              
          1999 return was received by the IRS on November 6, 2000, in an              
          envelope with a postage meter date of November 3, 2000.                     





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