Juan N. and Miriam J. Villareal, et al. - Page 14

                                       - 14 -                                         
          $4,565.74, petitioner testified that business was "real slow" and           
          that petitioners only earned approximately $350 in the 1 week               
          that petitioners were open for business in the 1994 tax year.               
               Petitioners did not calculate cost of goods sold or keep an            
          inventory for the 1994 tax year.  Other than testifying that the            
          restaurant earned $350 for the last week of December, petitioner            
          did not know how much food, soda, or restaurant supply costs were           
          actually incurred in the 1994 tax year.  In 1995, petitioners               
          continued to use food, restaurant supplies, and soda that was not           
          sold or consumed in the 1994 tax year.                                      
               On the basis of the record, we find that petitioners                   
          incurred food, restaurant supplies, and soda expenses in the                
          amount of $556 for the 1994 tax year.                                       
               g.  Repair and Maintenance Expenses                                    
               Petitioners claimed repair and maintenance expense                     
          deductions in the amount of $5,797 on Schedule C of their 1994              
          Federal income tax return.  These deductions represented costs              
          incurred by petitioners for repair of used equipment purchased              
          from equipment vendors, and the installation and repair of                  
          plumbing fixtures.                                                          
               Petitioner could not recall why some of the labor was                  
          performed, and there is nothing in the record to indicate that              
          petitioners made any attempt to contact service people to                   
          substantiate petitioners' claimed deductions.  Furthermore, some            
          of petitioners' claimed repair and maintenance expenses appear to           




Page:  Previous  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  Next

Last modified: May 25, 2011