Ralph Louis Vitale, Jr. - Page 13




                                        -13-                                          
               For the years in issue, petitioner reported no income from             
          his writing activity but claimed the following as deductible                
          expenses on his Schedules C:11                                              
          1993             1994                                                       
          Advertising                  --              $100                           
          Commissions and fees         $40               80                           
          Office expense               420              600                           
          Supplies                     150              --                            
          Travel                     4,230            9,195                           
          Meals and entertainment    2,520              786                           
          Utilities                    --               657                           
          Other expenses             7,830           12,099                           
          Total                  15,190           23,517                              
          For 1993, the item denominated "other expenses" consists of a               
          $4,350 joint venture payment to Northwest and $3,480 in cash                
          payments to prostitutes.  For 1994, other expenses consist of the           
          following:  $2,349 for the purchase of a computer, supplies, and            
          furniture; $480 for mailing expenses; $313 for membership dues;             
          $5,660 for credit card expenses on out calls; $1,295 for tuition            
          and books; $500 for sponsoring a race car team; and $1,502 for              
          miscellaneous other expenses.                                               
               Petitioner's travel and meal deductions include expenditures           
          for airfares, rental car expenses, food, and lodging in                     


               11Petitioner filed two amended returns (Forms 1040X) for tax           
          year 1994, one on June 15, 1995, and the other on July 7, 1995.             
          Each amended return had a new Schedule C attached, in which                 
          petitioner adjusted the amount of expenses that he claimed in               
          connection with his profession as an author.  The figures for               
          1994 represented in the table reflect the Schedule C expenses on            
          the amended return filed July 7, 1995.                                      






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