-18-
represented (with rounding) 1 percent of the total assets of the
LRFLP at that time.
8. Operation of the LRFLP
The LRFLP conducted no business activity and had no business
purpose for its existence. On its 1996 through 2000 Forms 1065,
U.S. Partnership Return of Income, the LRFLP reported no trade or
business income and claimed total deductions (and ordinary
losses) of $2,526, $2,546, $2,546, $10,504, and $13,771,
respectively. The specific items and amounts claimed as expenses
were:
1996 1997 1998 1999 2000
Florida taxes $1,889 -0- -0- $3,890 $3,332
Amortization 637 $2,546 $2,546 2,546 -0-
Professional fees1 -0- -0- -0- 4,068 10,439
2,526 2,546 2,546 10,504 13,771
1 The “professionals” to whom these fees were paid appear
to be Feldman and the accountant who prepared these Forms
1065. The record does not reflect who paid the accountant
to prepare the 1996, 1997, and 1998 Forms 1065.
The LRFLP also reported on its Forms 1065 the following income
from other than a trade or business:
1996 1997 1998 1999 2000
Portfolio interest $295 $2,062 $4,613 $5,335 19,198
Dividend income 5,274 34,257 39,793 43,348 74,499
Capital gain (loss) 968 2,505 7,220 (27,912) 20,078
Tax-exempt interest 18,437 103,249 85,641 75,887 70,931
Other tax-exempt income -0- 219 -0- -0- -0-
In preparing the Forms 1065, the LRFLP’s accountant relied
primarily upon Forms 1099 issued by the banks and brokerage
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