Guido Ruggiero and Kristin Ruggiero - Page 17

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          the remitted fellowship proceeds constitute an employee business            
          expense, deductible on Schedule A.  See Butchko v. Commissioner,            
          T.C. Memo. 1978-209, affd. 638 F.2d 1214 (9th Cir. 1981) (holding           
          taxpayer's payment to employer for cash register shortages                  
          resulted in employee business expense).                                     
                    (2)  Remaining Expenses                                           
               There is some confusion with respect to the amount of                  
          expenses remaining in dispute.  On Schedule C of the amended                
          return, petitioners claimed expenses related to petitioner's                
          research and writing in the amount of $33,481.  On the basis of             
          arguments presented prior to trial, petitioners now appear to               
          claim expenses relating to petitioner's activities in the amount            
          of $29,600, the amount allowed by respondent.  See supra p. 11 &            
          note 2 to table.  In any event, petitioners have offered no proof           
          that they are entitled to deductions in excess of $29,600, and we           
          sustain respondent's determination to that extent.                          
               Respondent determined that petitioner incurred the allowable           
          expenses as an employee of UConn.  Accordingly, respondent argues           
          that petitioner's allowable work-related expenses are deductible            
          as miscellaneous itemized deductions under section 67. In                   
          contrast, petitioners contend that petitioner was in the separate           
          trade or business of writing scholarly materials when he incurred           
          the expenses.  In so doing, petitioners argue that petitioner's             
          activities were not related to his employment at UConn.                     

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