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Petitioners attached to their 1995 income tax return, as
filed on October 18, 1996, a Schedule F and reported a net loss
of $46,395 from the Hoyt cattle operation. The loss reflected
gross income of $87,486 less total expenses of $133,881.
Expenses included $46,395 in depreciation and section 179
expenses and $87,486 in “1994 Sharecrop Bd Expenses”. In
addition, petitioners reported a net $3 loss from the sale of
breeding cattle on a Form 4797, Sales of Business Property,
reflecting a gross sale price for the cattle of $178,500 less a
cost basis of $317,733 (less $139,230 in depreciation).
Petitioners used the $46,395 in losses to offset in part the
$88,161 in adjusted gross income they reported in 1995, and
therefore they claimed a refund of $6,508 that was withheld from
their earnings from employment during the year.
Petitioners’ 1994 and 1995 income tax returns were filed
after they received extensions of the filing due dates. For
1994, petitioners filed a Form 4868, Application for Automatic
Extension of Time to File U.S. Individual Income Tax Return, and
received an automatic 4-month extension from the April 15 filing
date. On August 17, 1995, petitioners submitted a Form 2688,
Application for Additional Extension of Time to File U.S.
Individual Income Tax Return, and received an extended filing
date of October 16, 1995. Petitioners filed their 1994 return on
October 20, 1995.
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