Ronnie O. and G. June Craft - Page 3

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         stock of M.E. Moses, Co., Inc. (M.E. Moses), from 1991 or 1992               
         until around 1994.                                                           
               Petitioner claimed the following expenses on the Schedule C            
         of his joint 2001 Federal income tax return:                                 
               Car and truck expenses        $2,245.40                                
               Depreciation                  8,846.98                                 
               Legal and professional fees   4,650.00                                 
               Office supplies               449.13                                   
               Dues and subscriptions        1,162.00                                 
               Post office box rental        250.00                                   
                    Total                    17,603.51                                
         Petitioner contends that these expenses consist of the following:            
               1.  Car and truck expenses--driving petitioner did as an               
         executive of Craft-Barnett and consists of $1,022 for insurance              
         and $1,223.40 for gas and other expenses.                                    
               2.  Depreciation--depreciation of office equipment used in             
         petitioner’s work as an executive of Craft-Barnett in the amount             
         of $2,086.63 and depreciation of a 2001 Chevrolet pick-up truck              
         used in conjunction with his work with Craft-Barnett in the                  
         amount of $6,760.35.                                                         
               3.  Legal and professional fees--$3,300 in legal fees                  
         applicable to the “settlement of certain expenses involving                  
         transfer of M.E. Moses Company, Inc. stock in previous years”;               
         $1,000 in legal and accounting fees paid for “review of business             
         documents and review and preparation of the petitioners’ tax                 
         return”; and $350 in legal fees paid for the preparation and                 
         filing of a Plea of Abatement brought against petitioner by the              






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