- 4 - Starting in the early 1990s, Mrs. Storer assisted her husband with his photographic pursuits by recording his expenses in journals. With an educational background in accounting from the local community college, Mrs. Storer recorded these expenses using the cash basis method of accounting. Mrs. Storer has also prepared State tax documents, including sales tax reports. In 1993, petitioners engaged a management consultant to assist them in preparing a 5-year projection for turning their photography activity into a business. The management consultant provided petitioners with a series of flexible budgets and projections spanning through 2002. The management company based its projections on the assumption that by the year 2000, petitioners would have $21,200 in gross sales, and that by 2002, petitioners would have $21,500 in gross sales. Prior to 1993, Mr. Storer had purchased a large amount of “analog” photography and darkroom equipment for the studio and darkroom in the basement of petitioners’ home. Between 1993 and 2002, petitioners began to replace their “analog” equipment with new digital cameras, printers, scanners, and the supplies for printing digital photographs; namely, paper and ink cartridges. Petitioners completely dismantled their basement studio and darkroom in the early 2000s. Upon dismantling their basement studio, petitioners set up a “digital darkroom” consisting of aPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NextLast modified: November 10, 2007