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taken dietary supplements recommended by his physician and a
certified nutritionist.
Petitioner conducted a bookkeeping activity during 1990 and
1991. On a Schedule C attached to his 1990 return, he reported
gross income in the amount of $225 and claimed total expenses in
the amount of $10,782. On a Schedule C attached to his 1991
return, he reported no gross income and claimed total expenses in
the amount of $10,963. In 1991, he ended his bookkeeping
activity and referred his clients to another certified public
accountant.
Petitioner purchased personal care products sold by
Melaleuca, Inc. during 1991 and 1992. According to his bank
statements, the total amounts of his purchases in 1991 and 1992
were $344.32 and $325.28, respectively.
Petitioner traveled to Russia for 2 weeks in May 1992 to
investigate certain business ventures. In preparation for these
business ventures, petitioner had retained an office service and
warehouse space in Colorado Springs, Colorado.
The first issue for decision is whether petitioner is
entitled to Schedule C trade or business expense deductions for
1992. On a Schedule C attached to his 1992 return, petitioner
reported no gross income and claimed expenses in the total amount
of $20,745 with respect to a "trade" activity. In the statutory
notice of deficiency, respondent disallowed any deduction for the
claimed expenses.
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