5
in the amounts of $6,123 and $3,098 for 1990 and 1991,
respectively. On the Schedules C attached to his 1990 and 1991
returns, petitioner claimed the following deductions with respect
to his jewelry design activity:
Expense 1990 1991
Advertising $113 $67
Car and truck expenses 1,401 1,454
Insurance 446 427
Office expense 5,202 4,820
Rent or lease
Other business property 4,560 4,572
Supplies 480 720
Taxes and licenses 24 24
Travel, meals, and entertainment
Travel 679 3,477
Meals and entertainment 327 843
Utilities 1,228 1,416
Other expenses
Contributions 24 -0-
Shop expenses 7,850 3,957
Misc. expenses 960 1,200
Total $23,294 $22,977
Petitioner reported gross receipts from his jewelry design
activity of $637 and $528 in 1990 and 1991, respectively.
Petitioner did not report any income with respect to his
correspondence school activity.
In the notice of deficiency, respondent determined that
petitioner's jewelry design activity was not a trade or business
or an activity for the production of income. In the alternative,
respondent determined that petitioner failed to substantiate his
claimed expenses and failed to establish that any such amounts
were ordinary and necessary. Further, respondent determined that
any amounts constituting start-up expenses were to be amortized
over 60 months starting in the month the activity opened for
business.
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