Tax Court of Canada Judgments

Date: 20000828

Dockets: 98-2485-IT-I; 98-2486-IT-I

BETWEEN:

PAUL KOLMATYCKI, ANN GOIN KOLMATYCKI,

Appellants,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Mogan J.T.C.C.

[1] The appeals of Paul Kolmatycki v. The Queen (Court file 98-2485) and Ann Goin Kolmatycki (Court file 98-2486) were heard together on common evidence. The Appellants are husband and wife. At the commencement of the hearing, the parties agreed that the result in the wife's appeal would follow from the decision in the husband's appeal. Paul Kolmatycki was the only person to testify. I will therefore refer to him as the "Appellant" even though his wife is also an Appellant and, where necessary, I will refer to her as "his wife". The taxation years under appeal are 1992, 1993 and 1994 and both Appellants have elected the informal procedure.

[2] The principal issues in these appeals are whether certain losses, realized by the Appellant and his wife from different activities, are deductible in computing income from all sources for each year under appeal. According to the evidence, there were five unrelated activities which, for convenience, I will identify as follows:

1. Bancroft Restaurant

2. 2A Nina Street

3. 580 Christie Street

4. Westview Heights Limited Partnership (Ontario)

5. Harbourtowne Limited Partnership (Florida)

There is a sixth issue concerning the deduction of interest on borrowed money which I will consider after the five activities listed above.

1. Bancroft Restaurant

[3] The Appellant is a retired school teacher residing in Toronto but, during the years under appeal, he was a full-time teacher at Danforth Technical School or Malvern Collegiate. In 1979, the Appellant purchased a property in the Bancroft area of Ontario about five miles south of the intersection of Highways 28 and 121. It is on a private road about 1,000 feet off Highway 28 and cannot be seen from the highway. The Appellant paid $70,000 for the property in 1979 with a $20,000 down payment and the vendor taking back a mortgage for $50,000 at 10.5%. From 1980 to 1983, he renovated the property as a restaurant. He applied for the appropriate zoning and a liquor license. He attended courses at George Brown College in bartending, small kitchen management and quality/quantity food control. The restaurant opened on June 14, 1983 under the name "Kaye's Country Place".

[4] The restaurant was seasonal in the sense that it catered only to the summer trade. After 1983, the restaurant opened on the May 24th weekend and stayed open until Thanksgiving in early October. After sustaining losses in its first years of operation, the restaurant changed its policy in 1988 and was open for business only in July and August because there were not enough customers to justify being open from May 24th to the end of June and from Labour Day to Thanksgiving. In 1995, the restaurant stopped serving lunches and has served only dinner July and August since then. The Appellant described the style of the restaurant as not fast food but a "tablecloth" family operation.

[5] Kaye's Country Place lost money in its first 14 years of operation from 1983 to 1996 inclusive. It showed a modest profit of $365 in 1997 but a loss of $946 in 1998. The amounts of the losses for the years 1983 to 1988 are not in evidence but Exhibit A-5 contains the statements of operations for Kaye's Country Place attached to the Appellant's income tax returns for each of the years 1989 through to 1998. From Exhibit A-5, I have extracted the most important amounts for the years 1989 to 1996 and entered those amounts in Schedule "A" attached to these reasons for judgment. Schedule "A" shows that for the three years under appeal (1992, 1993, 1994) and the three preceding years, the restaurant had aggregate losses of $47,641 or an average annual loss of $7,940. In those same six years, the restaurant had average annual gross income of $14,070. On average, for the years 1989 to 1994, the sum of operating expenses plus cost of sales was about 156.5% of the gross income.

[6] The Appellant provided a number of reasons for the losses. The restaurant was a new business starting up in 1983. It could not be seen from Highway 28. The Madawaska Mine at Bancroft closed a few years after the restaurant opened. There was a general recession in 1991. In 1983, there was only one other restaurant in the area but there are now about eight other restaurants. And recently, in 1998, Bell Canada neglected to place the restaurant telephone number in the phone book. In 1995, the Appellant joined the Canadian Restaurant and Food Services Association which permitted him, as a merchant, to have a lower discount on the customer use of a "VISA" credit card.

[7] Counsel for the Respondent argued that Revenue Canada had allowed the Appellant and his wife to deduct their allocated portions of the restaurant losses for the nine years from 1983 to 1991 but that, for 1992, 1993 and 1994, there was no reasonable expectation of profit. The Appellant argued that the restaurant has now been reduced to a two-month dinner only business; the mortgage has been paid down; he and his wife had no personal benefit or use of the restaurant; and the modest profit in 1997 and reduced losses in 1995, 1996 and 1998 were a good indication that a profit could be made.

[8] The basic principle concerning reasonable expectation of profit appears in the Supreme Court of Canada decision in Moldowan v. The Queen, 77 DTC 5213. Dickson J. (as he then was) stated at page 5215:

Although originally disputed, it is now accepted that in order to have a "source of income" the taxpayer must have a profit or a reasonable expectation of profit. Source of income, thus, is an equivalent term to business: ...

... In my view, whether a taxpayer has a reasonable expectation of profit is an objective determination to be made from all of the facts. The following criteria should be considered: the profit and loss experience in past years, the taxpayer's training, the taxpayer's intended course of action, the capability of the venture as capitalized to show a profit after charging capital cost allowance. The list is not intended to be exhaustive. ...

When the Supreme Court of Canada refers to "the capability of the venture as capitalized to show a profit after charging capital cost allowance", I infer that the Court expected a particular venture to absorb reasonable expenses and costs. In the circumstances of these appeals, the Appellant and his wife did not pay themselves any salary or wages out of the restaurant operation although they provided valuable personal service to the venture. Any such salary or wages would have increased the reported losses and made the expectation of profit more remote. I conclude that, after continuous losses for nine years (1983 to 1991), the restaurant did not have a reasonable expectation of profit in 1992, 1993 and 1994 even though the reported losses in subsequent years (without any salary to the owners) were reduced significantly.

[9] The Federal Court of Appeal in Tonn et al v. The Queen, 96 DTC 6001 and in A.G. Canada v. Mastri, 97 DTC 5420 has provided a careful analysis of what the Supreme Court decided in Moldowan. As I read the decision in Mastri, a taxpayer may be unsuccessful on the question of reasonable expectation of profit from a particular venture even in circumstances where the taxpayer received no personal benefit from the venture. I refer to the following statement of Robertson J.A. at page 5423:

In Tonn, the Court clearly held that no personal advantage had accrued to the taxpayer who was seeking to deduct rental losses from his other sources of income. Nonetheless, the Court continued to pursue the deductibility of losses issue by applying the factors set out in Moldowan when assessing whether there was a reasonable expectation of profit. ...

I accept the Appellant's evidence that he and his wife did not receive any personal benefit from the restaurant. I still hold, however, that the restaurant did not have a reasonable expectation of profit in the years under appeal.

2. 2A Nina Street

[10] In 1985, the Appellant purchased a duplex at 2 Nina Street in Toronto at a cost of $202,000. Title to the property was taken only in his name. He made a down payment of $50,000 and the vendor took back a mortgage for $152,000. It was a real duplex in the sense that the ground floor and the second floor were each self-contained. There were no shared facilities or common areas. The Appellant and his wife lived in the lower half (unit 2B) while the upper half (unit 2A) was rented out to a tenant. Each unit was metered separately for electricity but there was only one heating supply.

[11] In 1986, the Appellant placed a fresh mortgage on 2 Nina Street for $175,000 which permitted him to pay $25,000 toward retiring the mortgage on the Bancroft Restaurant. In 1989, the tenant upstairs vacated and so the Appellant advertised the premises at $1,200 per month. He could not find a tenant at that rate and eventually leased unit 2A to a mother and daughter at $860 per month. By 1992, the mortgage was paid down to $163,800 but the interest rate was about 10%. In 1994, the Appellant sold the property at 2 Nina Street for $360,000 and realized a capital gain.

[12] There is no evidence that the Appellant ever earned a profit from renting 2A Nina Street. Exhibit R-3 contains the statements of rental operations for 2A Nina Street attached to the Appellant's income tax returns for each of the years 1988 through to 1994. From Exhibit R-3, I have extracted what I regard as the most important amounts and entered those amounts in Schedule "B" attached to these reasons for judgment. Schedule "B" shows a consistent pattern of losses from 1988 to 1994. The statements for each year indicate that the Appellant allocated all expenses on a 50-50 basis between the lower unit occupied by him and his wife and the upper unit (2A) rented out to a tenant.

[13] On the lower part of Schedule "B", I have extracted from "allocated expenses" the amounts of mortgage interest and property tax allocated to rental unit 2A. In each year, the total of mortgage interest plus property tax easily exceeded total rent from unit 2A. If the Appellant has allocated a reasonable amount of mortgage interest and property tax to unit 2A, and if he was obtaining the highest rent possible from arm's length tenants, he has established that he could not earn a profit from renting unit 2A because the sum of mortgage interest plus property tax exceeded rent even before taking into account other expenses. The Appellant allocated mortgage interest and property tax 50-50 between unit 2B (the ground floor occupied by him and his wife as a personal dwelling) and unit 2A (the second floor rented to a tenant) probably because the living areas of the two floors are approximately equal. I am not satisfied that a 50-50 allocation of mortgage interest and property tax is reasonable having regard to the fact that the Appellant owned all of the land and building containing the duplex at 2 Nina Street.

[14] Considering the decision of the Federal Court of Appeal in Mohammad v. The Queen, 97 DTC 5503, and considering the absence of evidence with respect to the comparable areas of the two dwelling units at 2 Nina Street, and whether the building had a basement or third floor attic, I do not propose to substitute my allocation of mortgage interest and property tax for that of the Appellant. Rather, I will accept the Appellant's allocation and conclude that the rental of 2A Nina Street in 1992, 1993 and 1994 did not have a reasonable expectation of profit.

3. 580 Christie Street

[15] The building at 580 Christie Street, Toronto, was an apartment building operated either as a co-operative or like a co-operative. The Appellant and his wife looked at the co-ownership units in 1986 as possible investments. They generally believed at the time that the units would be free of rent control because of the co-operative style of operation. The Appellant purchased two units and his wife purchased two other units. The Appellant hoped to merge his two units into one but he could not get vacant possession of his two units at the same time. Upon purchase, one of the Appellant's units was vacant and the other was occupied. He paid $39,000 for the vacant unit and $36,900 for the occupied unit. He described the financing of the purchase of the occupied unit as follows:

Down Payment $9,767

Assumed first mortgage 12,666

New second mortgage 14,467

Purchase Price    $36,900

[16] After his purchase, the Appellant discovered that his two units were subject to rent controls under Ontario law. For 1987 and 1988, the monthly rent per unit was set at $411.41 and $451.34, respectively. In 1988, the Appellant sold one of his units and realized a capital gain. The operation of the building at 580 Christie Street had financial problems in 1989-1990 and Price Waterhouse ("PW") took over the management of the building on behalf of the co-owners. In 1990, PW found a new mortgagee who would accept a first mortgage on each unit at $37,000. The Appellant decided to refinance his remaining unit with a new first mortgage at $37,000 but discovered that the amounts he had paid down on his existing mortgages from 1986 to 1990 were absorbed by the fees of PW and lawyers.

[17] The Appellant's remaining unit started to show a modest profit in 1994. He argued that he would have shown a profit earlier but for the Ontario rent control law and the PW management fee. I accept that argument. Exhibit R-5 is a group of financial statements showing the profit/loss history of the Appellant's suite no. 1208 at 580 Christie Street for the period 1988 to 1998. The profit and loss record is as follows for the period 1988 to 1996:

1988 loss $ 715

1989 loss 2,010

1990 loss 4,123

1991 loss 3,218

1992 loss 3,312

1993 loss 979

1994 profit 199

1995 flat -0-

1996 profit    58

[18] The Appellant's down payment was approximately 25% of the 1986 cost. His financing expenses were reasonable. He genuinely believed that his units were free from rent control. And he could not have foreseen the financial problems which would require PW to take over management of the building. In my opinion, the Appellant's ownership of suite no. 1208 always had a reasonable expectation of profit. I would allow him to deduct his losses of $3,312 in 1992 and $979 in 1993.

4. Westview Heights Limited Partnership (Ontario)

[19] In 1989, the Appellant invested in a limited partnership which was developing a condominium apartment building known as "Westview Heights" in Kitchener, Ontario. The Appellant purchased unit 1605 which was identified as a "C" unit at a cost of $138,400 financed as follows:

First mortgage $98,000 at 12 7/8% per annum

Second mortgage 15,000 at 10% per annum

Equity Trust Loan 25,400 at 10% per annum

Cost    $138,400

The units in Westview Heights were offered for sale through Yorkton Securities. Exhibit R-8 is a Cash Flow Projection for Westview Heights for the period 1988 to 1995 showing that, with the extended financing, an owner of a C unit would not make a payment toward the cost of his unit until 1992. Exhibit R-6 is a group of operating statements for Unit 1605, Westview Heights for the years 1988 to 1998. According to Exhibit R-6, the losses allocated to Unit 1605 for the period 1988 to 1998 were as follows:

1988 $ 4,190

1989 2,528

1990 9,475

1991 13,396

1992 15,831

1993 9,419

1994 11,462

1995 7,901

1996 4,369

1997 2,032

1998 1,865

[20] The aggregate losses in the period 1988 to 1994 were $66,301 resulting in an average annual loss of approximately $9,400. In 1992 or 1993, the first mortgage on Westview Heights went into default and the building was placed in receivership. The Appellant purchased unit 1605 from the mortgagee for $97,638 rather than abandon it. He signed a pooling agreement under which the mortgage company would rent the units at fair market value. At the end of 1993, each owner was assessed $2,000 in order to accumulate a reserve to do some emergency repairs and pay off some prior debts. The Appellant stated in evidence that as of January 2000, the units were all rented and prospects were starting to look good.

[21] According to Exhibit R-6 (Westview Heights Operations), the Appellant did not receive any rent at all in the years 1988 to 1991; he received rent of only $1,779 in 1992; nil rent in 1993; and $2,661 rent in 1994. I note that in 1994, his reported loss was $11,462 and so his Westview Heights expenses in 1994 must have been approximately $14,123 ($14,123 minus $2,661 equals $11,462). I have no hesitation in concluding that Westview Heights' losses are not deductible in the years under appeal because there was no reasonable expectation of profit from that source in those years.

5. Harbourtowne Limited Partnership (Florida)

[22] In 1989, the Appellant purchased a condominium (unit 604) through an investment in a limited partnership identified as Harbourtowne Condominiums at Dunedin, Florida. This was a new building just north of Tampa, Florida and about one mile inland from the Gulf coast. The Appellant described this investment as only a commercial project. In his mind it was a business property. He never stayed at the Harbourtowne Condominium and none of his family ever used it for any purpose. The cost in 1989 was $64,900 (US dollars) which the Appellant financed with a first mortgage of $34,400 (US dollars) and a loan from Canada Trust in Toronto.

[23] The general partner of the Harbourtowne project was to provide management for a 5% fee. The rental revenue and the cash flow were guaranteed for the first five years. The occupancy was expected to be 95% of the available units. The investment did not turn out well. The projected income was not achieved. In 1994, there was a significant decline in real estate values in the Dunedin area of Florida. All members of the limited partnership were affected because they had agreed to pool their rents from all 264 units. In 1997, the owners retained a consultant to advise on how to sell the building. In 1998, the Appellant considered withdrawing from the rental pool agreement because the pool was shrinking from (i) defaulting owners who walked away from their investment; and (ii) owners who moved into their own units to try to preserve their investment. The Appellant did neither. There were changes of management in 1997 and 1998, and the Appellant has listed his unit for sale.

[24] Exhibit R-9 contains the statements of real estate rentals from the Harbourtowne Condominium for the years 1989 to 1998 (excluding 1992) as attached to the Appellant's income tax returns for those respective years. From Exhibit R-9, I have extracted what I regard as the relevant amounts for all years (no information provided for 1992) and entered those amounts in Schedule "C" attached to these reasons. In Schedule "C", 1994 is irregular because it is the only year which shows interest income of $12,000 with a corresponding increase in expenses to $27,060. Schedule "C" shows a consistent level of rental income with expenses always exceeding revenue and a resulting consistent pattern of losses.

[25] The Appellant argued that his investment in Harbourtowne (like his investment in Westview Heights) was bona fide and long term but that time and circumstances were against him. In the absence of any personal benefit through use or occupancy, he claims that his business judgment should not be second-guessed by Revenue Canada officials. The Appellant relies on the decision of Allen et al v. The Queen, 99 DTC 968 in which my colleague Bowman J. referred to the Minister "intoning the ritual incantation no reasonable expectation of profit". The facts in Allen are different from the facts in these appeals. Bowman J. stated in the first paragraph of his reasons:

... The appellants invested in units of a limited partnership that carried on the business of renting apartments. It is admitted that the partnership business was carried on with a reasonable expectation of profit. ...

In these appeals, it is not admitted that Harbourtowne (or Westview Heights) carried on business with a reasonable expectation of profit. Also, in Allen the Minister was attempting to use "reasonable expectation of profit" as a basis for denying the deduction of interest whereas, in these Kolmatycki appeals, the Minister has disallowed the actual operating losses reported by the Appellant himself. In other words, the Minister argues that there was no genuine business in Harbourtowne (or Westview Heights) because neither enterprise had a reasonable expectation of profit. The evidence contained in the Appellant's income tax returns over a number of years (Exhibits R-6 and R-9) supports the Minister's arguments with respect to both enterprises.

[26] There is now in Canada an attitude which encourages an individual with disposable income to invest personal funds in a commercial activity (not necessarily a "business" for income tax purposes) with little regard for profit so long as the cost of the investment can be "written off" or "deducted". The cost is usually characterized as a loss in the annual operation of the commercial activity. There is, of course, an implicit understanding that the amount "written off" or "deducted" will reduce personal income with a corresponding reduction in the amount of income tax payable.

[27] Exhibit R-8 is an example of this attitude. Exhibit R-8 pertains to Westview Heights and not Harbourtowne but I use it here for illustrative purposes. It is "Cash Flow Projections" for the years 1988 to 1995. Exhibit R-8 shows "Before Tax Payments" and "After Tax Cash Flow". The projections are based on the assumption (perhaps unwarranted) that any purchaser/investor will be entitled to deduct in computing income the annual losses from 1988 to 1995 as they accumulate to a total of $75,475 for that eight-year period. It is apparent from Exhibit R-8 that a purchaser of a "C" unit had little regard for profit, at least in the short term, because the projections show average annual losses of $9,400 for the first eight years. I conclude that it was only the amount of income tax "saved" when the losses were written off or deducted which made the project attractive to a potential investor.

[28] The Federal Court of Appeal alluded to this attitude in Mohammad v. The Queen, 97 DTC 5503 when Robertson J.A. stated at page 5506:

Lack of immediate profit does not appear to dissuade taxpayers from engaging in the rental market for at least two reasons. First, the anticipated gain on the ultimate disposition of the property may be perceived to overtake any losses stemming from the payment of interest and, more so, if the profit is taxed as a capital gain. ... Second, the impact of the interest expense can be diminished if the rental loss can be deducted from other sources of income, typically employment income, pursuant to section 3(d) of the Act. These tax realities help explain why individual taxpayers avoid the corporate structure as a means of holding ownership in rental properties. ... Thus, it may be prudent to delay incorporation until such time as a rental property generates a profit. ...

When an individual with disposable income has purchased a rental property which produces annual operating losses for several years, it is difficult for that individual to prove that he/she had a reasonable expectation of profit if the property is a new building and the developer of the building has actually forecast such losses or promised financial returns which do not meet the test of common sense. If that individual is permitted to apply (i.e. deduct) such losses against other sources of income, typically employment income, until the property is sold, then all taxpayers in Canada will have helped to underwrite the holding of that property pending its ultimate sale. In my opinion, having regard to all taxpayers in Canada, it is more equitable if such losses are not applied against other sources of income but are capitalized and added to the original cost of the rental property in order to more truly reflect the amount of the gain or loss upon sale.

[29] Returning to Judge Bowman's statements in Allen, there may be times when counsel for the Minister of National Revenue will intone "reasonable expectation of profit" like a mantra but those words were adopted by the Supreme Court of Canada in Moldowan and were the subject of extensive comment by the Federal Court of Appeal in Tonn and Mastri. I see no reason why "reasonable expectation of profit" should not be accepted as a standard for measuring whether a particular commercial activity qualifies as a business (i.e. source of income) for income tax purposes. In paragraph 21 above, I easily concluded that Westview Heights had no reasonable expectation of profit in the years under appeal. Having regard to Schedule "C", I also conclude that Harbourtowne Condominium had no reasonable expectation of profit in the years under appeal.

6. Interest on Borrowed Money

[30] The Notices of Assessment for the years under appeal were not produced in evidence as exhibits. According to the pleadings (Reply paragraphs 3 and 6(p)), Revenue Canada disallowed as deductions in computing income the following amounts identified as interest expenses:

1992 $8,527

1993 3,870 (Appellant)

3,870 (Appellant's wife)

The Minister assumed that these amounts were referable to the one-half of the duplex at 2 Nina Street (unit 2B) occupied by the Appellant and his wife as their principal residence. Exhibit R-3 (rental statements for 2A Nina Street) appears to support the Minister's assumption because, for 1993, the total interest on the mortgage was $15,479 of which one-half ($7,739.50) was deducted as an expense of the rental unit 2A while the other half was accepted as a personal portion and, apparently, allocated $3,870 to each of the Appellant and his wife. The Appellant offered no evidence to the contrary and, if he and his wife did split the other half and each deducted $3,870, then I would find that such deductions were not permitted because they were personal expenses. The same reasoning would apply to the amount $8,527 for 1992 because it is close to one-half of the total interest ($17,465) paid for that year on the mortgage at 2 Nina Street.

[31] In evidence and argument, there were references to other amounts of interest included as "carrying charges" at line 221 of the Appellant's income tax returns for 1992 and 1993 (Exhibits R-4 and R-7, respectively). According to those two exhibits, the carrying charges and their corresponding interest component were:

Carrying Charges Interest Component

1992 $30,133 $27,787

1993    29,152 27,322

In Schedule 5 to the Appellant's income tax returns, the interest component for each year was described as "Interest to acquire an interest in a limited partnership". Notwithstanding that description, counsel for the Respondent suggested in argument that the amounts of interest shown in paragraph 30 above (with respect to Nina Street) were part of the interest component shown in the table in this paragraph. The different amounts of money borrowed by the Appellant and his wife and the interest payable on those borrowings were not traced in sufficient detail for me to know what amounts of interest are in dispute other than the amounts shown in paragraph 30 above. I would dismiss the appeals with respect to the amounts shown in paragraph 30 above.

[32] If any amount of interest has been deducted with respect to money borrowed to acquire the Appellant's interest in the Westview Heights and Harbourtowne limited partnerships (apart from interest expenses already included in the computation of losses from those partnerships) I would disallow such interest as a deduction in computing income because I have already determined that neither one of those partnerships had a reasonable expectation of profit. The pleadings, however, do not indicate that there is any dispute with respect to the disallowance of interest expenses other than the amounts set out in paragraph 30 above.

[33] Accordingly, I will dismiss the Appellant's appeal for 1994 but allow his appeals for 1992 and 1993 only to permit the deduction of the losses from renting 580 Christie Street. The appeals of the Appellant's wife will be disposed of in the same way.

Signed at Ottawa, Canada, this 28th day of August, 2000.

"M.A. Mogan"

J.T.C.C.

SCHEDULE "A"

KAYE'S COUNTRY PLACE

	1989	1990	1991	1992	1993	1994	1995	1996
Gross Income	$14,025	$14,573	$13,389	$13,482	$14,683	$14,263	$17,040	$14,402
Gross Profit	3,790	1,926	2,266	5,634	3,662	2,085	7,822	6,878
Expenses	16,216	13,363	10,997	8,622	9,584	8,222	8,137	7,341
Loss	12,426	11,437	8,731	2,988	5,922	6,137	315	463

SCHEDULE "B"

2A NINA STREET

	1988	1989	1990	1991	1992	1993	1994 Part Year
Total Rent	$8,046	$8,580	$9,054	$10,282	$10,693	$10,050	$3,500
Allocated Expenses	14,318	13,301	13,494	13,951	14,689	16,037	5,921
Loss	6,272	4,721	4,440	3,669	3,996	5,987	2,421
*Mortgage Interest	9,930	8,825	8,631	8,436	8,732	7,739	2,850
*Property Tax	2,317	2,591	2,794	2,954	3,179	3,448	1,651
*Part of Allocated              Expenses

SCHEDULE "C"

HARBOURTOWNE CONDOMINIUM

DUNEDIN, FLORIDA – UNIT 604

	1989	1990	1991	1992	1993	1994	1995	1996	1997	1998
Rent	-0-	$5,873	$5,769	No Evidence	$6,497	$7,542	$7,639	$7,238	$7,246	$5,299
Interest Income	-0-	-0-	-0-		-0-	12,000	-0-	-0-	-0-	-0-
Expenses	4,143	9,740	9,804		9,939	27,060	10,001	10,350	11,811	16,836
Loss	4,143	3,867	4,035		3,442	7,518	2,362	3,112	4,565	11,537