- 18 -
values, which is ordinarily an improper method of valuing
inventory where there is no showing that fair market value was
lower than cost. Petitioner had checked the box on her Schedule
C to value inventory at cost. We find petitioner's beginning and
ending inventory for 1992 to be as follows:
Beginning Ending
Inventory Inventory
Crystal (horse) -0- -0-
Candy (horse) -0- -0-
Sparky (dog) $150 $150
Wanda (dog) 200 200
Rascal (dog) 250 0
Buddy (dog) 220 220
Rose (horse) 350 -0-
2 pups -0- -0-
Total 1,170 570
Since petitioner substantiated $7,100 of materials and supplies6
and $6,900 of miscellaneous costs, her total allowable costs for
1992 are $14,600 ($7,100 + 6,900 + (1,170 - 570)).
3. 1993
Petitioner again assigned values to some animals in her
beginning and ending inventory based on her estimates of their
fair market value, an improper method of valuing inventory in the
circumstances. Petitioner's method of accounting, as established
in her 1992 tax return, was to value inventory at cost. We
therefore find petitioner's beginning and ending inventory for
1993 to be as follows:
6 See supra note 3.
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