Uber Gonzalez and Linda Gonzalez - Page 3

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          These Schedule C expenses consisted of $5,600 for driving 20,000            
          miles "hauling crew to worksite" and $620 spent on safety                   
          equipment.                                                                  
                                       OPINION                                        
               We must decide whether petitioner correctly reported his               
          income and expenses on Schedule C of his return.  Respondent                
          contends that petitioner, as an employee, must claim the expenses           
          at issue on his Schedule A as miscellaneous itemized deductions             
          and that they are limited to the extent they exceed the 2-percent           
          floor imposed by section 67.  “To be reportable on Schedule C, a            
          taxpayer's income must arise from a trade or business, other than           
          that of being an employee.  If a taxpayer's earnings arise from             
          working as an employee, they must be reported as wages.”  Walker            
          v. Commissioner, 101 T.C. 537, 541 (1993).  Petitioner admitted             
          at trial that he was an employee of Wes-Tex.                                
               Section 62(a)(1) allows taxpayers to deduct from gross                 
          income trade or business expenses “which are attributable to a              
          trade or business carried on by the taxpayer, if such trade or              
          business does not consist of the performance of services by the             
          taxpayer as an employee.”  The $6,220 in expenses deducted by               
          petitioners on their Schedule C was for unreimbursed employee               
          expenses.  Petitioners therefore must deduct these expenses                 
          subject to the 2-percent floor of section 67.  Secs. 62, 67, 162;           
          In re Black, 131 Bankr. 106 (Bankr. E.D. Ark. 1991); see also               






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