- 12 -
with a handwritten note on each check stating "newsstand awning".
Mr. King did not give any breakdown of those amounts, nor did he
provide a monthly statement from Discover or American Express
which presumably would have provided a breakdown of all the
charges on his Discover and American Express cards.
Finally, Mr. King produced an invoice from an acrylics
company for approximately $630 that does not contain a
description of what was sold. According to Mr. King, the invoice
represented the purchase of new candy racks, which are still
being used. However, in petitioners' brief, they argue that no
candy was sold at his newsstand. We also note that petitioners'
amended return reports that Schedule C income was entirely from
lottery commissions. Petitioners have not established their
entitlement to these claimed repair and maintenance deductions.13
Unreported Income
The next issue is whether petitioners had unreported income
of $11,667 from the sale of a newsstand and unreported interest
income of $227. Petitioners argue that the proceeds from the
sale of the newsstand were not omitted from their return, but
12(...continued)
check payable to American Express was for $335.48.
13We note that even if the expenses were substantiated, they
appear to be capital in nature, which would require
capitalization, absent a sec. 179 election.
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