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shareholders.” Markwardt v. Commissioner, 64 T.C. 989, 995
(1975).
Petitioners on their 1986 Schedule C claimed deductions for:
Insurance--$100, mortgage interest--$69,860, taxes--$340, and
contract labor--$69,850. Petitioners, on their 1989 Schedule C
claimed deductions for: Insurance--$7,945, mortgage interest--
$65,639, taxes--$8,050, and repairs--$14,490.
Petitioners have not demonstrated that the expenses were
incurred for the vending machines that petitioners have claimed
they owned. The record does not reflect that the expenses were
paid or incurred during the tax years 1986 and 1989. In
addition, petitioners have not shown that any such items were
ordinary and necessary business expenses. Sec. 1.162-1(a),
Income Tax Regs.
Petitioners contend that, in 1986, they owned 70 vending
machines out of the total of 490 and that they prorated all
corporate operating expenses between the vending machines alleged
to be theirs and the total. However, petitioners presented no
evidence demonstrating the proration or allocation between the
vending machines claimed by petitioners and the corporate vending
machines.
It should also be noted that PWIC, PWMC, and C.B. Crest, in
addition to commercial water purification, leased systems for
home use. Petitioners conceded on brief that they failed to
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