Michael D. and Suzan L. Storer - Page 5

                                        - 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 a             

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next 

Last modified: November 10, 2007