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Advertising............................$ 496
Travel and entertainment............... 324
Supplies............................... 2,249
Utilities and telephone................ 588
The advertising expense consisted of two deerheads, which were
worth approximately $200 apiece. The travel and entertainment
expenses consisted of fireworks, fishing, and motel costs. Under
supplies, petitioners deducted a $1,575 video camera purchased for
both personal and business use, and deducted the costs of utilities
and telephone used at their residence. Petitioners also deducted
$379 for dog food, veterinary bills, and a chain for their dog.
c. 1986 Joint Federal Income Tax Return
Petitioners claimed, among others, the following expenses as
Schedule C deductions on their 1986 return:
Employee benefit program..............$ 3,356
Mortgage interest..................... 14,277
Supplies.............................. 5,365
Security guard........................ 682
Contributions......................... 11,567
Petitioners could not substantiate the supplies deduction. The
security guard expense represented a fence erected to house
petitioners' family dog. The employee benefit program deduction
consisted of family doctor and medical expenses. Petitioners
deducted $14,277 for home mortgage interest as a business expense.
The contribution deduction represented petitioners' charitable
contributions. Petitioners also claimed a $1,588 jobs credit on
their 1986 Schedule C.
In prior years, petitioners deducted their medical, home
mortgage interest, and charitable contribution expenses as Schedule
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