- 7 -
dwelling used exclusively on a regular basis as "the principal
place of business" of the taxpayer's trade or business.
Petitioner admitted under cross-examination that, in
addition to the $12,323 Schedule C loss claimed on his 1988
return, he has never realized a net profit from his book-selling
activity. He reported net losses of $17,992, $61,283, and
$7,280, respectively, for 1989, 1993, and 1994. Except for small
amounts of other income petitioner earned from commissions on
insurance renewals, his only explanation to the Court as to how
his negative cash-flow was financed was that he was on the
accrual basis of accounting, and he carried his accounts on a
"continuing basis". The Court is skeptical that petitioner's
creditors would "carry" his unpaid accounts over the several
years that he sustained losses.
Petitioner did not corroborate his testimony to support the
positions he asserted. Under these circumstances, the Court is
not required to, and the Court does not, accept such testimony to
support petitioner's positions. See Geiger v. Commissioner, 440
F.2d 688, 689-690 (9th Cir. 1971), affg. per curiam T.C. Memo.
1969-159; Mills v. Commissioner, 399 F.2d 744, 749 (4th Cir.
1968), affg. T.C. Memo. 1967-67; Tokarski v. Commissioner, 87
T.C. 74, 77 (1986). Accordingly, the Court sustains respondent
with respect to petitioner's Schedule C activity.
Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011