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negotiates contracts with its clients. She maintains files of
the band's lyrics, music books, and audio and video demos. She
is responsible for hiring accompanying musicians, coordinating
their stage apparel, and issuing their paychecks. All of the
above-mentioned management activities are conducted in the
office.
The first issue for decision is whether petitioner is
entitled to Schedule C business expense deductions. Petitioner
filed her 1992 return under married filing separately filing
status. On a Schedule C attached to her return, petitioner
reported gross receipts in the amount of $21,542.50 and claimed
the following deductions:
Bad debt $183.33
Car and truck expenses 3,627.20
Depletion 2,100.00
Insurance 210.00
Interest 1,880.00
Professional services 645.00
Office expenses 629.00
Rental of business property 2,169.33
Supplies 1,143.00
Travel 33.33
Meals and entertainment 1,050.40
Utilities 1,289.00
Stage clothes 2,777.00
Stage makeup 930.00
Miscellaneous 890.00
Dry cleaning 106.00
Donations 940.00
In the statutory notice of deficiency, respondent disallowed
all of the claimed deductions.
Respondent's determinations in the statutory notice of
deficiency are presumed to be correct, and petitioner bears the
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