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for 1989 and 1990. Respondent now agrees that petitioner is
allowed deductions for band advertising expenses in the amounts
of $1,416 for 1989 and $1,596 for 1990. Respondent allowed
petitioner no deduction for amounts allegedly paid to bands that
played at the Bullfrog.
2. Race Car Expenses--1987 and 1988
During 1987 and 1988, petitioner owned a "cadet car"13 that
he raced in a novice class on Saturday nights at Stateline
Speedway (speedway). Petitioner also owned a truck, described
below, which he used to tow the race car to and from the
speedway, located in Busti, New York, approximately 4 miles from
his home. The Bullfrog and Arthur R. Gren Co., Inc., a beer
distributor, sponsored the race car. Patrons from the Bullfrog
often came out to the speedway to see petitioner race.
On his 1987 and 1988 returns, petitioner claimed Schedule C
losses from the operation of his race car. For 1987, petitioner
reported income of $1,965 and claimed expenses of $2,865. For
1988, petitioner reported income of $2,440 and claimed expenses
of $2,604.
Petitioner's expenses associated with the race car included:
Gasoline, oil, tires, A-frames, ball-joints, spark plugs, spark
plug wires, distributor caps, pit entrance fees, paint, and
13 A "cadet car" is a "stock car" which is defined as a racing
car having the basic chassis of a commercially produced assembly-
line model. Webster's Third New International Dictionary (1993).
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