Gary D. and Johnean F. Hansen - Page 19

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               Wage income              $72,690                                       
               Interest income              110                                       
               Rental property loss      (2,534)                                      
               DSBS 87-A loss           (27,170)                                      
               DSBS 87-C loss           (32,306)                                      
               Farm income                8,681                                       
               Total income              19,471                                       
          The losses from DSBS 87-A and DSBS 87-C were reported on                    
          Schedules K-1, Partner’s Share of Income, Credits, Deductions,              
          Etc., issued to both petitioners by the partnerships for the                
          partnerships’ taxable years ending in 1991.  Although it appears            
          from the return that the farming income is related to                       
          petitioners’ Hoyt investment, it is unclear how this amount of              
          income was calculated or earned.  Petitioners reported a total              
          tax liability of $799 for 1991.  Attached to the return was a               
          “Material Participation Statement”.  On this statement,                     
          petitioners averred that they spent 114 hours during 1991 working           
          in various Hoyt-related activities.  The 1991 return was signed             
          by Mr. Hoyt as the return preparer on June 19, 1992, it was                 
          signed by petitioners on June 27, 1992, and it was stamped                  
          “Received” by respondent on July 23, 1992.                                  
               Starting with the Form 1045 and the 1987 return, and                   
          continuing through the 1991 return, Mr. Hoyt or a member of the             
          Hoyt organization prepared petitioners’ tax forms.  Upon signing            
          the returns, Ms. Hansen did not know how the Hoyt-related items             
          were derived; she knew only that Mr. Hoyt or a member of his                
          organization had entered the items on the Schedules K-1 and on              






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