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Forms 1041, U.S. Income Tax Return for Estates and Trusts, and
deductions were claimed in the same amount, resulting in no
taxable income.
Blanco Springs allegedly owned rental property, although the
income and expenses of the real property rentals were reported on
Schedules E, Supplemental Income and Loss, attached to the
Haneys’ returns for 1997 through 1999. TuSwanz held the real
property that was occupied by the Haneys as a residence. There
was no rental agreement, and the Haneys did not pay TuSwanz rent
for the residence. The Haneys, and not TuSwanz, were compensated
by insurance for damage to real and personal property resulting
from a flood in October 1998. The Haneys claimed a casualty loss
on their 1998 Federal income tax return for damage from the
flood. As of 1999, TuSwanz and J.O.’s brother, Don Hal Haney,
each held a 50-percent beneficial interest in Adobe.
H-Five maintained bank accounts that were used to pay the
Haneys’ personal living expenses. Checks written on Adobe and
payable to Patricia were deposited into the H-Five bank account.
TuSwanz and Adobe received royalty payments from various entities
and received payments from the U.S. Department of Agriculture.
Tax Reporting and Examination
After an election of S corporation status for J&J was made
in 1987, the income of the asphalt business was reported on
Forms 1120S, U.S. Income Tax Return for an S Corporation. After
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Last modified: May 25, 2011