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shows total expenses for education in the amount of $5,000. In
her brief, respondent notes the fact that this statement shows
only $5,000--rather than the $8,951--that petitioners claimed on
the Schedule C for ENT. Respondent argues that this shows that
the other items of education expenses should be disallowed, but
respondent makes no argument on brief that specifically addresses
the $5,000 amount. Based on the record before us, we hold that
petitioners are entitled to a $5,000 education expense deduction
with respect to ENT.
Petitioner testified that the claimed education expenses
also include expenses for other items, such as the rental of
rooms from the Arizona Club and the rental of booths for home
shows. Petitioner admitted that he had a personal account with
the Arizona Club and that he visited that establishment for
nonbusiness purposes. In addition, the Schedule C for ENT
already claimed a deduction for the rental of other business
property in the amount of $3,569.63. Petitioners have not shown
that the amount of rental expenses claimed as education expenses
is not included in the deduction allowed for rents on the
Schedule C. As previously noted, petitioners' own disbursement
journal shows that only $5,000 was spent for education. Except
for the $5,000, petitioners have failed to overcome the
presumption that respondent's determination is correct.
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Last modified: May 25, 2011