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Mrs. Magassy relating to the Feadship. Hopkins did not attempt
to verify the business purpose of any of the bills she paid
relating to the Feadship.
During 1995, 1996, and 1997, when Mrs. Magassy visited the
Feadship in Florida, she would charge her airline ticket, her
hotel and car rental expenses, and her restaurant meals on her
personal credit card, and the expenses were treated by SMSM as
business expenses.
On April 29, 1997, SMSM sold the Feadship to Classic Yachts
Restoration, Ltd., for $1.1 million.
The charter income and claimed ordinary business expenses
and losses of SMSM (as an S corporation) (including the 1997 loss
on the sale of the Feadship) relating to the Feadship that were
reflected on SMSM’s Federal income tax returns for 1995, 1996,
and 1997, and that were passed through to petitioners’ joint
Federal income tax returns for each year, are reflected below:
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