Gary D. Myers - Page 5

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          etc., for 2001.  On the Schedule K-1, the institutional trustee             
          identified petitioner as the beneficiary and accurately listed              
          the following items of income allocable to him:                             
                    Allocable share item               Amount                         
                    Interest                           $3,579                         
                    Ordinary dividends                      6                         
                    Annuity income                     10,827                         
          The total of these three amounts, $14,412, was then correctly               
          identified as petitioner’s income for regular tax purposes.                 
               Petitioner filed a Federal income tax return for 2001.  On             
          his return, petitioner listed his filing status as single.                  
          Petitioner reported adjusted gross income in the amount of                  
          $7,554, consisting almost exclusively of wages.  Petitioner did             
          not report any allocable share item in respect of his late                  
          mother’s trust as disclosed by the institutional trustee on the             
          Schedule K-1.                                                               
               Also on his 2001 return, petitioner claimed an earned income           
          credit.  Petitioner claimed the credit in his own right without             
          regard to a qualifying child.                                               
               In the notice of deficiency, respondent determined that                
          petitioner failed to report income from his late mother’s trust             
          in the amount of $14,412 as disclosed by the institutional                  
          trustee on the Schedule K-1.  Respondent also determined that               
          petitioner was not entitled to an earned income credit based on             
          (1) the amount of his adjusted gross income, see sec. 32(a), and            

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