- 10 -
For 1989, petitioners filed a return that reflected a
farming loss of $45,693, resulting in a tax liability of $103.
The partnership loss claimed by petitioners in 1987 was
claimed on a Schedule E, Supplemental Income Schedule.4 An
attachment to the 1987 return stated that the loss of $4,226 was
a nonpassive ordinary loss from RCR 85-2. The farming losses
claimed by petitioners in 1987, 1988, and 1989, were reported on
Schedules F, Farm Income and Expenses. Each of the Schedules F
listed petitioners as the proprietors of the farming activity,
and each stated that petitioners materially participated in the
operation during the relevant year. The losses were derived as
follows:
1987 1988 1989
Gross income -0- -0- -0-
Depreciation $(43,530) $(38,693) $(38,693)
“Board expense” (1,500) (750) (7,000)
(Loss) (45,030) (39,443) (45,693)
No other expenses related to the farming activities were listed
on the Schedules F. The “Detail Depreciation Schedule”
accompanying petitioners’ return in each of these 3 years
described the depreciable property as “breeding sheep”.
4Only the first two pages of petitioners’ 1986 return appear
in the record. Therefore, the details surrounding petitioners’
claimed partnership loss and general business credit in that year
are unknown. We also note that the record is silent as to
whether, and if so how, the 1986 taxable year--which is not
before the Court in these cases--was resolved by petitioners and
respondent.
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