- 12 -
deduction on his 1989 return. The remaining difference between
the $7,703 disallowed by respondent and the $6,744 conceded by
petitioner consists of miscellaneous items purchased at The
Sharper Image, which petitioner has failed to prove were
deductible business expenses.
After the $7,703 disallowance of the claimed $20,838 claimed
office expenses, respondent allowed $10,000 as first-year expense
under section 179, and required depreciation of the remaining
$3,134 in subsequent years. Petitioner claims that respondent
made a $3,134 math error. He simply does not understand that
respondent capitalized this amount rather than disallowing it
entirely. Respondent's treatment of this amount is sustained.
As to the $3,889 "books and reference materials", which
petitioner sought to deduct as "supplies", respondent disallowed
$543. Of the $543, $429 was for course materials on real estate,
and $113.89 was unexplained. Petitioner testified that the two
real estate courses were used to educate himself because many of
his clients were involved in real estate. We accept petitioner's
testimony on this point and believe there is a sufficient nexus
between petitioner's accounting practice related to real estate
clients and these courses to justify the deduction of their $429
cost. Respondent's disallowance of the remaining $113.89 is
proper due to the lack of any evidence supporting the deduction.
Respondent disallowed petitioner's 1990 claimed deduction of
$3,697 for supplies, which petitioner concedes.
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011