- 3 -
consequences related to the venture, and he relied solely on
promoters who had no known experience in jojoba plant farming.
Petitioner prepared a joint 1982 Form 1040, U.S. Individual
Income Tax Return. As a result of losses claimed, petitioners
requested a refund of $3,742.07, which had been paid by
withholding and estimated tax payments. On Schedule C, Profit or
(Loss) From Business or Profession, petitioner reported his
business as Bass Enterprises, with gross receipts of $444.30 and
a net loss of $25,827.79. Among the items shown as constituting
the loss was a “Write-off of Farming Venture $13,150".
Petitioner did not have a Schedule K-1, Partner’s Share of
Income, Credits, Deductions, etc., from Cal-Neva when he filed
the 1982 return. The amount that petitioner deducted on
Schedule C was his estimate of the amount to be claimed based on
his conversations with the promoters of Cal-Neva at the time that
he paid the $5,000.
On February 11, 1987, a Notice of Final Partnership
Administrative Adjustment was sent to petitioners as a partner in
Cal-Neva. In the notice, research and development expenses of
$193,150 and amortization of organizational costs of $42 were
disallowed to Cal-Neva. A petition on behalf of Cal-Neva was
filed by Yolanda J. Benham (Benham), tax matters partner, as
docket No. 6594-87. On October 18, 1993, the parties in docket
No. 6594-87 filed a Stipulation to be Bound setting forth their
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: March 27, 2008