Subhendu Das - Page 4

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               Thereafter, petitioner expended $4,634.59 for several items            
          in connection with his invention, such as a lathe with various              
          attachments and a computer with accessories.  Petitioner                    
          testified that the equipment was transferred to the corporation.            
          Petitioner filed for a patent, which was eventually obtained in             
          his name.  The filing cost for the patent was $585.  There was no           
          formal agreement between petitioner and CCSI for use of the                 
          patent.  During 1993 and 1994, petitioner was primarily engaged             
          in obtaining investors for the product.  Neither CCSI nor                   
          petitioner had any product for sale.                                        
               On Schedule C for 1993 under the name of Computer Controlled           
          Systems, petitioner reported no income and claimed deductions of            
          $16,628 for business expenses and $1,002.11 for a home office.              
          On Schedule C for 1994 under the name of CCSI, petitioner claimed           
          deductions of $12,900 for business expenses and $882.31 for home            
          office.  In 1994, petitioner reported $1,600 in gross receipts              
          and $600 for cost of goods sold resulting in gross income of                
          $1,000.3  The Schedule C expenses consisted of:                             


                                       1993              1994                        
            Car and truck               $280              $200                        
            Sec. 179 deduction1       15,648            12,000                        
            Insurance                    150               150                        

          3  Petitioner stated at trial that, to date, the sprinkler                  
          system has not been ready for sale.  Therefore, we assume the               
          gross receipts reported in 1994 were not related to the sprinkler           
          system.                                                                     




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