- 14 - In addition, despite the fact that selecting a name for his business was "very important", petitioner did not file his fictitious business name statement with the State of California, indicating the name under which he planned to conduct his ancient artifacts business, until May 7, 1991. Petitioner testified that it was not until that time that he satisfied the criteria for his business plan, which included accumulating a certain amount of inventory. Petitioner was not actively involved in an ancient artifacts trade or business during 1990. Instead, he was accumulating the necessary inventory and developing the reputation he would need to conduct the business. At trial, petitioner stressed the amount of preparation required to conduct this type of business, yet he acquired his first piece of inventory only in the fall of 1989. Although lack of sales is not dispositive, petitioner made no sales of ancient artifacts in 1990. The rational explanation for his failure to make any sales is that he was not conducting an active trade or business during 1990, as he did not yet have sufficient inventory or a commercial gallery. Furthermore, according to petitioner's testimony, he was not conducting any type of sales activity. Accordingly, respondent is sustained on this issue. Petitioner's 1990 expenses related to ancient artifacts are startup expenses pursuant to section 195.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011