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Maria used a computer in connection with her Avon business.
She bought the computer in 2000 or 2001 for $800. Before Maria
began to use the computer in connection with her Avon business,
petitioners used it for personal purposes. During 2003, in
addition to business use, Maria used the computer for personal e-
mail and to browse the Internet for purposes not related to her
Avon business.
Maria used a printer (original cost--$180), a scanner
(original cost--$100), and facsimile equipment (original cost--
$50) in connection with the computer she used in connection with
her Avon business.
Maria used two desks in connection with her Avon business.
The desks were bought in 1995 for about $1,300 to $1,500 apiece.
Before Maria began to use the desks in connection with her Avon
business, petitioners used them for personal purposes.
Discussion
In general, a taxpayer is entitled to deduct “all the
ordinary and necessary expenses paid or incurred during the
taxable year in carrying on any trade or business”. Sec. 162(a).
During 2003, Maria operated a Schedule C business as an Avon
representative. However, section 274 disallows deductions
otherwise available in many cases unless certain substantiation
requirements have been met.
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Last modified: March 27, 2008