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The Schedules K-1 for Target and Alofs for 1996 contain
handwritten notations suggesting that these schedules are amended
documents and that originals reflected ordinary income (loss) of
($800,000) and zero, respectively. Likewise, on certain copies
of the Schedule K-1 from Excellence for FYE 1996, the property
distribution amount of $196,000 is circled and marked with the
handwritten notation “NEVER PAID”.
Petitioners filed original joint Forms 1040, U.S. Individual
Income Tax Return, for their 1993, 1994, 1995, and 1996 taxable
(calendar) years in August of 1994, October of 1995, May of 1998,
and October of 1997, respectively. They reported thereon
adjusted gross income, taxable income, and total tax as set forth
below:
Adjusted Taxable Total
Year Gross Income Income Tax
1993 $300,328 $288,440 $90,751
1994 786,481 766,539 279,854
1995 749,133 686,319 247,127
1996 (581,774) -0- 182
Attached to each return were pertinent portions of Schedule
E, Supplemental Income and Loss, showing income or loss from
partnerships and S corporations. The Schedules E reported income
or loss from Target, Alofs, and Excellence as follows:
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Last modified: May 25, 2011