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Concepts and, in fact, describes himself as "not computer
literate."
Petitioner made no attempt to market either of the video
games other than through ALA. No video games were sold in 1983.
On April 5, 1985, petitioner received the first and only payment
from ALA in the amount of $3.59 representing income earned from
the sale of copies of the video games.
On his 1983 Federal income tax return, petitioner computed
an investment tax credit in connection with his involvement with
Century Concepts in the amount of $14,375, of which $2,751 was
claimed with respect to 1983. The unused portion was carried
back to taxable years 1980 through 1982. Petitioner claimed
deductions in the amount of $12,718 on Schedule C of his 1983
return with respect to Century Concepts. Petitioner received a
refund in the amount of $18,105 with respect to taxable year
1983.
OPINION
Issue 1. Century Concepts
Section 162 allows a deduction for ordinary and necessary
expenses paid or incurred during the taxable year in carrying on
a trade or business. In order to establish entitlement to
deductions and credits, taxpayers have the burden of proving that
they meet the statutory requisites. New Colonial Ice Co. v.
Helvering, 292 U.S. 435 (1934).
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