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After concessions made by respondent, the remaining issues
for decision are: (1) Whether petitioner's consulting activity
was an activity engaged in for profit within the meaning of
section 183, and (2) whether petitioner has substantiated the
nature and amount of various deductions he claimed on the
Schedules C attached to his 1996 Federal income tax return.1
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. Petitioner resided in San
Jose, California, when the petition in this case was filed.
During 1996, petitioner was employed full time as an
engineer for Ultratech Stepper, Inc. (Ultratech). In 1996,
petitioner received wages from his employment with Ultratech in
the amount of $41,537. Petitioner contends that he worked for
Ultratech, 40 hours per week and that he spent all of his spare
time conducting a consulting business. Petitioner asserts that
his consulting activity involved instructing clients in personal
investment strategies, including a covered option trading
technique. Petitioner contends that he spent 30 to 40 hours each
week engaged in the consulting activity.
1 In his trial memorandum, respondent concedes that petitioner
is liable for self-employment tax only in the amount of $221 and
that petitioner is entitled to a self-employment tax deduction in
the amount of $110. Petitioner's liability for self-employment
tax and an adjustment to his corresponding deduction are
computational adjustments that depend on the resolution of the
issues in dispute in this case.
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