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For the years 1977 through 1980 petitioner claimed
management fees to CDC, a corporation in which he held a majority
interest, in the amounts of $96,396, $72,609, $67,943, and
$102,101, respectively. He offered no evidence that these
amounts were paid and, in fact, stipulated that the 1979 amount
was not paid. He also was unable to show a legitimate business
purpose for a portion of the expenses claimed in each year. He
was negligent in failing to substantiate that the management fees
paid to his corporation were ordinary and necessary business
expenses.
For the years 1979 and 1980 petitioner claimed losses for
farming activities on Schedule F in the amounts of $128,458 and
$249,204, respectively. There is no evidence in the record to
support these large amounts. However, there is affirmative
evidence that CDC or its subsidiary, Caspian Farm Systems, paid
the expenses or amounts incurred. Petitioner's failure to
provide any documentation in support of these large losses was
due to negligence.
For the years 1979 and 1980 petitioner claimed partnership
and small business corporation losses in amounts in excess of
$55,000 and $69,000, respectively. Included in these amounts was
a loss claimed in 1980 of $5,771 for Danny's Hideaway, when in
fact petitioner had disposed of his entire interest in that
business in 1979. Petitioner presented virtually no evidence in
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