- 4 -
activities in 1994, 1995, and 1996 on Schedules C, but reported
$14,161, $16,389, and $12,533 of net Schedule C losses for the
1994, 1995, and 1996 tax years, respectively. On his Schedule C
attached to his 1995 Federal income tax return, petitioner
reported no gross receipts and claimed the following expenses:
Advertising $91.27
Car/truck expenses 2,949.14
Depreciation/section 179 2,755.33
Supplies 131.21
Travel expense 229.17
Meals/entertainment 190.62
Other expenses 1,760.86 $8,107.60
Business use of home 8,281.35
Total expenses 16,388.95
In 1997, petitioner obtained a consulting contract with L
Three Communications, a local aerospace company, but was not paid
until 1998.
In a notice of deficiency dated June 3, 1998, respondent
determined that petitioner was not entitled to Schedule C
expenses of $16,389 for the year in issue because he (1) was not
engaged in an activity for profit pursuant to section 183, and
(2) failed to substantiate his claimed 1995 Schedule C
deductions. Respondent also determined that petitioner was
entitled to additional itemized deductions for real estate taxes
and interest expenses in the amount of $3,361 for 1995.
As an initial matter, we deal with an issue raised by
petitioner concerning respondent's conduct during audit and
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011