Les B. Martin and Millie A. Martin - Page 14

          that they are nondeductible capital expenditures, to be added to            
          the basis of the stock acquired.  Wagner v. Commissioner, 78 T.C.           
          910, 915 (1982).  Petitioners failed to show error in respondent's          
          determination.  Thus, we sustain respondent's disallowance of the           
          deduction for investment expenses.                                          
          Job-Search Expenses                                                         
               Petitioners claim entitlement to deduct in 1989 $9,213 in job-         
          search expenses.  Although respondent argued that petitioners               
          failed to show the business purposes of these expenditures, Mr.             
          Martin testified that when he realized that his position with Aero-         
          Motive was in jeopardy, he began to look for other work.  We                
          believe him, but we do not find that the entire amount of job-              
          search expenses that petitioners claim is deductible.                       

               A review of petitioners' receipts shows a number of items that         
          are not ordinary and necessary expenses, as required by section             
          162(a).  For instance, petitioners submitted receipts for the               
          purchase of People magazine and the Enquirer, and for gifts to              
          friends visited by petitioners.  There is a $65 check payable to            
          Video Land, with no notation as to its purpose.  Petitioners also           
          submitted receipts for the purchase of insecticide, charcoal, and           
          charcoal starter.                                                           
               Based on the record presented, and using our best estimate, we         
          find, and thus hold, that petitioners are entitled to a deduction           
          for job-search expenses in the amount of $8,000 for 1989.                   

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