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this is an ordinary and necessary business expense that
petitioners incurred. Accordingly, petitioners are entitled to a
deduction of $439.
Telephone
Petitioners claimed deductions of $1,114 for long distance
and $240 for “estimated” cash telephone calls. Petitioners
claimed these were business calls to producers, agents, artists,
managers, movie executives, and casting directors. Petitioners
provided copies of their telephone bills for 1994. It appears
that petitioners designated all long distance calls from their
residence as business calls. Petitioners did not detail whom
they called or the business purpose.
Since petitioners did not identify the business purpose of
any long distance calls, they are deemed to be personal under
section 262 and not deductible.
Vehicle Expense
Petitioners drove a 1970 Ford truck during the year at
issue. Petitioners claimed a vehicle expense of $8,540 for the
business use of their vehicle. This amount is based on 80
percent of actual expenses attributed to the vehicle.
Petitioners retained receipts for gas purchases, repairs,
insurance, and registration. Petitioners did not maintain
records of the business or personal use of the vehicle.
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