Elizabeth Giles - Page 16

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               The record does not indicate the amount of income, if any,             
          that petitioner earned from any of these competitions.                      
          VII.  Relevant Financial Data                                               
               The attached appendix lists the gross income, specific                 
          operating expenses, depreciation, total expenses, and net income            
          (loss) that petitioner reported for the horse activity on her               
          1988 through 2002 Schedules C.  With the exception of $20,000               
          that petitioner received in 2001 from the sale of Bogaz, we know            
          nothing about the specific source of the other items of reported            
          gross income.  While some of those other items of income may have           
          been prize money earned at shows, petitioner reported some of the           
          amounts of these other items net of cost of goods sold, which               
          indicates to us that not all of those amounts were prize money              
          from the shows.                                                             
               From 1988 to 2002, petitioner reported on her Federal income           
          tax returns the following amounts of total income (exclusive of             
          income (loss) from the horse activity), income (loss) from the              
          horse activity, total income, and taxable income.                           
          Total income         Income                                                 
          (exclusive of income     (loss)                                             
          or (loss) from the      from the      Total    Taxable                      
          Year   horse activity)     horse activity  income   income                  
          1988      $111,854           ($27,687)    $84,167  $56,874                  
          1989       108,078            (28,736)     79,342   50,593                  
          1990       126,236            (37,973)     88,263   56,944                  
          1991       113,487            (28,136)     85,351   49,945                  
          1992       109,003            (29,545)     79,458   45,438                  
          1993       109,536            (43,422)     66,114   36,195                  
          1994       116,888            (34,072)     82,816   55,677                  





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