Lorenzo D. Harris - Page 4

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          trial, petitioner and Ms. Harris had reconciled and were living             
          together again as husband and wife.                                         
               During taxable year 2002, petitioner was employed by Dillon            
          Yarn Corporation and Burley Management.  Dillon Yarn Corporation            
          issued to petitioner a Form W-2, Wage and Tax Statement, which              
          reflected wages earned of $23,678.72.  The record does not                  
          contain a Form W-2 issued by Burley Management.  Although                   
          petitioner did not pay child support to Ms. Harris during taxable           
          year 2002, he paid for health insurance for KH during taxable               
          year 2002.                                                                  
               Ms. Harris filed a Form 1040, U.S. Individual Income Tax               
          Return, for the 2002 taxable year.  She did not claim KH as her             
          dependent on said return.                                                   
               On or about February 2, 2003, petitioner electronically                
          filed his Form 1040 for the taxable year 2002.  Petitioner filed            
          his 2002 Federal income tax return as a head of household and               
          claimed a dependency exemption deduction for KH.  Petitioner also           
          claimed an earned income credit with KH as the qualifying child,            
          a child tax credit with KH as the qualifying child, and a Hope              
          Scholarship Credit pursuant to section 25A.3  Additionally,                 
          petitioner reported wage income of $25,813 and an adjusted gross            
          income of $25,813.                                                          


          3As previously noted, at trial petitioner conceded that he                  
          was not entitled to the Hope Scholarship Credit pursuant to sec.            
          25A.                                                                        




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