12
Petitioner compiled a notebook titled "The Food Comparison
Machine" with a copyright date of 1991. The notebook explains
petitioner's nutritional information system.
Petitioner reported on Schedules C of his Federal income tax
returns the following expenses for the Food Store:
1988 1989
Supplies $4,829 $2,383.06
Legal and professional fees 20,231 23,999.01
Dues and publications 1,635 0
Meals and entertainment 98 56.30
Travel 674 502.78
Utilities 1,851 2,056.38
Rent or lease 0 947.14
Total 29,318 29,944.67
Petitioner reported no gross receipts or sales for the Food
Store in 1988 or 1989.
Petitioner contends that his expenditures related to the
nutritional information system are deductible pursuant to section
174 as computer software developmental costs.
Petitioner must prove that he is entitled to the claimed
deductions. Rule 142(a); Welch v. Helvering, 290 U.S. 111
(1933). Research or experimental expenses, for purposes of
section 174, are research and developmental costs in the
experimental or laboratory sense. Mayrath v. Commissioner, 41
T.C. 582, 590 (1964), affd. 357 F.2d 209 (5th Cir. 1966).
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