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income for 1999, and petitioner was responsible for additional
income in the amount of $46,970. Mr. Seidel filed a petition to
this Court at docket No. 8003-03S, in which he contested his
liability as to the additional one-half of the net distribution
from his CWSC 401(k) plan. Mr. Seidel’s case and this case were
tried separately on the Court’s San Francisco, California, Trial
Session beginning on March 1, 2004.
Port of Mystery
During 1997, petitioner began an activity under the name
Port of Mystery, to sell and repair antique and estate jewelry.
Although petitioner had no prior experience in this field,
petitioner claimed she had an “eye” for jewelry. During taxable
year 1999, petitioner did not maintain books and records for Port
of Mystery, such as a general ledger or other appropriate
journals. However, petitioner did attach a Schedule C, Profit or
Loss from Business, to her 1999 Federal income tax return. On
her Schedule C, petitioner claimed as follows:
Income Amount
Gross receipts $750
Less: Cost of goods sold 4,449
Gross profit (3,699)
Gross income (3,699)
Expenses
Advertising $25
Car and truck expenses 273
Depreciation and section 179 expense 181
Travel expenses 150
Utilities 394
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