10
Respondent concedes a $3,173.21 deduction for credit card
service fees and a $30.82 deduction for bank fees, and we find
that petitioner paid $279.09 for Ticketline advertising expenses
in 1988.
Petitioner argues that he paid $4,545.40 of other Ticketline
expenses. These expenditures related to Finnimore's obligations
for items such as office lease payments, car payments, car
insurance, and rent on Finnimore's apartment. These expenditures
were not ordinary and necessary expenses of Ticketline, and we
sustain respondent's determination as to these items.
Self-Employment Tax
Section 1401 imposes a tax on net earnings of $400 or more
from self-employment income, defined as gross income derived from
carrying on a trade or business, less allowable deductions. Sec.
1402(a) and (b). The parties agree that petitioner is liable for
self-employment taxes if we find that he had unreported income in
1988. We have so found. Thus, petitioner is liable for self-
employment taxes under section 1401.
Nutritional Information System
Around 1987, petitioner began developing a nutritional
information system that he called the "Food Store". Petitioner
envisioned nutritional information stored in a computer to help
grocery shoppers select food based on its nutritional value.
Initially, petitioner intended to feature the nutritional
information system in his own natural foods store. Petitioner
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