Keith F. Marason - Page 13

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                                 c.  Travel Expense                                   
          Findings of Fact and Opinion                                                
               In addition to deducting some transportation cost under                
          travel expenses, petitioner also deducted other transportation              
          costs under contract labor.  To avoid confusion we have combined            
          with the travel expenses the expenses claimed for contract labor            
          to the extent that they represent work done to petitioner's                 
          Porsche or other costs of transportation.  Respondent disallowed            
          travel expenses of $3,5539 in 1988 as well as $11,92910 in 1989             
          and $8,65611 in 1990.  Petitioner concedes $436 of claimed travel           
          expense for 1989, for a $373 Amtrak ticket used by petitioner's             
          mother when she visited him and for $63 in parking tickets.                 
          Petitioner also concedes $300 for 1990.                                     
               Petitioner claimed to own two cars during the years at                 
          issue, a 1982 Porsche and a 1957 Volkswagen (VW).  Since his                
          Porsche was in the shop from late 1988 to sometime in 1990,                 
          petitioner briefly rented a car from Avis, and also rented a BMW            
          from Joseph Clare.  Petitioner claims that he used the Porsche              
          and the rented cars solely for business but admitted at trial               
          that he did not keep a mileage log, and testified only summarily            
          that he used the cars to visit clients.  Nevertheless, respondent           

          9  Petitioner deducted this entire amount under contract labor.             
          10  Both the Stipulation of Facts and the Notice of Deficiency derive       
          this number by attempting to subtract $6,095 from $18,027.  Thus, there is a
          $3 error in petitioner's favor that we accept.                              
          11  Petitioner deducted $3,520 of this amount as contract labor.            




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