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Mrs. Corrigan intended to use the JAC Ranch for the
breeding, sale, and showing of horses. She had no source of
income or capital other than what she received from petitioner.
She used these funds to pay the operating expenses and mortgage
payments for JAC Ranch. Mrs. Corrigan generally requested, and
petitioner advanced, approximately $10,000 per month for the
payment of expenses for hay and grain, breeding costs, hired
help, and the purchase, training, and showing of horses. During
the time petitioner made these payments, he and Mrs. Corrigan
were legally divorced.
Petitioner and Mrs. Corrigan did not enter into a joint
venture or profit and loss agreement with respect to the
operation of the JAC Ranch. Petitioner and Mrs. Corrigan were
divorced when they filed what purported to be joint Federal
income tax returns and joint amended returns. The purported
joint returns included claimed losses with respect to the
activities at the JAC Ranch. Petitioner and Mrs. Corrigan were
not entitled to file joint income tax returns for the years under
consideration.
Attached to the purported joint returns were Schedules C
reflecting Mrs. Corrigan as the operator and sole proprietor of
the ranch. On separate Schedules C, petitioner, alone, was shown
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Last modified: May 25, 2011