- 123 -
for 1977, and to Coudert Freres in the amount of $22,500 in 1977
are not deductible because they were not ordinary and necessary
business expenses of petitioner.
The professional fee claimed by petitioner in the amount of
$9,312.49 in 1976 paid to Larry Castoe was not his ordinary and
necessary business expense.
During 1976 petitioner paid $19,799.12 to J. Foley, an
architect. This amount is includes $4,779.12 paid with respect
to a housing project for General Dynamics and $15,000 paid with
respect to the purchase and construction of the building on
Riverside Drive that housed CTC's operations. For the years at
issue petitioner reported no income from General Dynamics or a
housing project. These professional fees were not ordinary and
necessary business expenses of petitioner. Instead, they were
capital expenditures.
In 1977 petitioner paid the accounting firm of Price
Waterhouse & Company the amount of $2,425.20 for Price
Waterhouse's annual fees as resident agent for WHIP, a Bahamian
corporation. He deducted this amount on his 1977 return. This
payment was an ordinary and necessary business expense of
petitioner because WHIP was merely a shell corporation.
In 1978 petitioner issued two checks in the total amount of
$5,000 to Sandra Rossi and Celia Longenbaker. These payments
were recorded in CTC's journal as payment for Mr. Shamloo, an
Page: Previous 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 NextLast modified: May 25, 2011