Diane and Frank Burkley - Page 8




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          third floor apartment starting in October 2002 for $500 a month.             
          In addition to paying rent, tenants occupying both of the South              
          Vernon Avenue apartments were required to pay all utilities                  
          attributable to their respective units.                                      
               Petitioners continued to own the South Green Street property            
          after they purchased the South Vernon Avenue property.                       
          Petitioners’ daughter, Vernice, occupied the South Green Street              
          property immediately after petitioners moved.  Vernice paid                  
          petitioners $500 a month rent beginning in September 2002 and was            
          also responsible for paying all utilities with respect to the                
          South Green Street property.  Two of Vernice’s minor children--              
          L.B. and J.B.--lived with her at the South Green Street                      
          property.3  These same children were listed as dependents on                 
          petitioners’ 2002 Federal income tax return.                                 
               The South Green Street and the South Vernon Avenue                      
          properties are 5.1 miles apart.                                              
               Petitioners used the services of Mr. Ingram to prepare and              
          file their 2002 return.  Petitioners’ 2002 return reflected the              
          following: (1) $196,153 in wages, salaries and tips; (2) $29,916             
          Schedule E loss; (3) $166,282 adjusted gross income; (4) $73,353             
          in Schedule A deductions; (5) $16,886 total tax due; (6) $3,670              
          alternative minimum tax; (7) $40,538 Federal income tax withheld;            
          and (8) $23,652 refund.                                                      

               3 The Court uses initials when referring to minor children.             






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