Csaba L. Magassy and Frances H. Magassy - Page 14

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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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