- 5 -
Ruby testified that after the audit, and apparently during
settlement negotiations, petitioners raised a new issue of
whether they are entitled to deduct $8,028 in rental payments for
taxable years 1993 and 1994. These amounts were not claimed as
deductions on the Schedules C for those years despite the fact
that numerous other deductions were claimed on the Schedules C.
Ruby contends that she rented an apartment to promote her beauty
sales business. Ruby claims that she used the apartment
exclusively for product demonstration, sales, storage of beauty
products, and to recruit new members to join the business. She
also alleged that she held weekly meetings at the apartment.
Ruby's main product line consisted of aloe vera juice, gels, and
berry nectar.
After a review of the record, we find that petitioners are
not entitled to rental deductions for 1993 or 1994. Aside from
her self-serving testimony, the only other evidence Ruby
introduced in support of her position consisted of copies of
three 12-month apartment leases commencing on June 1, 1992, June
1, 1993, and June 1, 1994. Upon a review of the leases, we note
that each of the three leases listed only Preston, and not Ruby,
as the lessee. Moreover, Preston was the only signatory on the
three leases. Two of the leases also provided that Preston would
be the sole occupant of the apartment. (This line is blank on
the June 1, 1993, lease.) All three leases provide that the
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011