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Hopkins’s S Corporation’s claimed 1999 ordinary loss of $36,066).
Petitioners jointly filed Form 1040, U.S. Individual Income
Tax Return (1999 joint return), for their taxable year 1999.
Petitioners’ 1999 joint return reported, inter alia, the $88,254
capital gains distribution and the $204,002 profit-sharing plan
distribution. Petitioners’ 1999 joint return included two
Schedules C, Profit or Loss From Business (Schedule C). One such
schedule (Mr. Hopkins’s sole proprietorship’s Schedule C) related
to Mr. Hopkins’s sole proprietorship known as MPH Enterprises.
That Schedule C reported $128,610 of gross receipts, claimed Mr.
Hopkins’s unidentified expenditures of $10,179 as an advertising
expense deduction, and showed a net profit of $44,219.
In Schedule E, Supplemental Income and Loss (Schedule E),
included as part of petitioners’ 1999 joint return (petitioners’
Schedule E),5 petitioners claimed, inter alia, a nonpassive loss
of $103,150 from Mr. Hopkins’s S Corporation and a total loss of
$83,872.6 The nonpassive loss of $103,150 from Mr. Hopkins’s S
Corporation claimed in petitioners’ Schedule E was equal to the
sum of (1) Mr. Hopkins’s S Corporation’s claimed 1999 ordinary
5Petitioners’ Schedule E was incomplete in that it consisted
of only one page.
6Petitioners determined the total loss claimed in petition-
ers’ Schedule E by reducing (1) the total of the respective
nonpassive losses that they claimed in that schedule from Mr.
Hopkins’s S Corporation and another S corporation by (2) the
nonpassive income that they reported in that schedule from a
limited partnership.
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Last modified: May 25, 2011