Ronnie O. and G. June Craft - Page 4

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         Hopkins County, Texas, Property Tax Appraiser.  All of these fees            
         were paid to petitioner’s attorney, Clinton J. Wofford.                      
               4.  Office supplies--$449.13 in office supplies which were             
         for use in Craft-Barnett.                                                    
               5.  Dues and subscriptions--these expenses were used to                
         acquire newspapers and similar publications to review lots and               
         houses for Craft-Barnett.                                                    
               6.  Post office box rental expense--used as the official               
         mailing address for Craft-Barnett, Abilene Investment Properties,            
         and ROC FLP.                                                                 
               Petitioner did not report any income for 2001 on the                   
         Schedule C.  For 2001, he reported his $50,000 salary from Craft-            
         Barnett on line 7 of Form 1040, U.S. Individual Income Tax                   
         Return, and his share of the income from Craft-Barnett on                    
         Schedule E, Supplemental Income and Loss.                                    
               Craft-Barnett adopted a resolution requiring petitioner and            
         Barnett, as vice president and president of the corporation                  
         respectively, to incur expenses as may be necessary or required              
         and stating that they shall not be reimbursed by Craft-Barnett               
         for these expenses.  The resolution states that petitioner “shall            
         also be responsible for supplying office space and his own                   
         vehicle for his business services and shall not be reimbursed                
         therefor by the Corporation.”                                                








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