Gregory A. Maslow and Marina Maslow - Page 2

          determination that petitioners underreported their income and               
          overstated Schedule C deductions for 1992.  The specific issues we          
          must resolve are:                                                           
               (1) Did petitioners underreport their income in 1992 by                
          $25,112?  Respondent determined this amount through the bank                
          deposits method, showing total deposits of $82,072,1 of which               
          $45,332 was reported by petitioners on their tax return and $11,628         
          was conceded by respondent at trial as nontaxable.  We find that            
          the $25,112 difference came from nontaxable sources; thus, we hold          
          that petitioners did not underreport their 1992 income by $25,112.          
               (2)  Must petitioners include $7,220 in income, representing           
          the market value of a trip to Scotland and England petitioner               
          Gregory A. Maslow earned in 1992 as a sales award from Kentucky             
          Central Life Insurance Co.?  We hold they must.                             
               (3) Are petitioners entitled to deduct various claimed                 
          Schedule C business expenses that respondent disallowed? We hold            
          that petitioners are entitled to a portion, but not all, of the             
          claimed Schedule C business expenses, as explained in greater               
          detail infra.                                                               
              (4) Are petitioners liable for the accuracy-related penalty            
          under section 6662 for 1992 and for an addition to tax for failure          

               1    The notice of deficiency states in one instance that              
          the deposits for 1992 total $80,096 and in another instance                 
          $81,029.  On brief, respondent states the total deposits as                 
          $82,072.  On the basis of our holding that the unidentified                 
          deposits are not taxable, the differing deposit amounts are of no           

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