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and $51,299), to arrive at taxable income of zero. The Schedule
C business income amounts were computed as follows:
1996 1997
Gross income $516,309 $455,750
Expenses
Advertising 0 356
Car and truck 9,970 11,472
Commissions and fees 224,250 326,940
Depreciation 3,504 4,507
Insurance 1,665 2,273
Mortgage 1,738 4,860
Office 213 11,142
Repairs and maintenance 1,832 8,768
Taxes and licenses 2,519 2,420
Travel 4,086 14,326
Meals and entertainment 256 1,937
Utilities 1,214 3,724
Other 2,256 8,123
Total expenses 253,503 400,848
Net profit 262,806 54,902
The other expenses for 1996 comprised solely meeting expenses,
while the other expenses listed for 1997 included bank service
charges of $486, directors’ meetings of $1,058, education of
$2,164, and medical expenses of $4,415.
The amounts reported as gross receipts represented payments
made by customers for Aegis trust packages sold by Mr. Richardson
and deposited into accounts over which petitioners had signatory
authority. The car and truck expenses related to the 1996
Mercury. The expenses claimed for depreciation, insurance,
mortgage, repairs and maintenance, taxes and licenses, and
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