-6-
return, the amount claimed as investment expenses was reduced to
$872. At trial and in their posttrial brief, petitioners state
they are willing to concede 40 percent of the $872, so that now
they claim $349 for investment expenses. The investment expenses
were incurred with respect to Mr. Martin's investigating
petitioners' possible purchase of stock in publicly held companies.
Respondent disallowed this deduction primarily on the basis of
petitioners' failure to substantiate, and on the alternative basis
that even if the expenses are substantiated, they were incurred in
connection with searching for or acquiring new investments and
should be added to the basis of the stock acquired.
Job-Search Expenses
On Schedule A of their 1989 return, petitioners claimed
$15,355 in job-search expenses. These expenses were incurred prior
to and following the termination of Mr. Martin's position as
president of Aero-Motive. At trial and in their posttrial brief,
petitioners state they are willing to concede 40 percent of the
$15,355, so that now they claim $9,213 for job-search expenses.
Respondent disallowed this deduction on the basis of petitioners'
failure to substantiate and petitioners' failure to show the
business purpose of the expenditures.
Tax-Work Expenses
On Schedule A of their 1989 return, petitioners claimed $3,612
in tax-work (audit) expenses. The expenses are for travel to their
attorney's office and related activities relative to prior years'
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