- 28 -
Respondent now concedes that some of the business profits
were used to support the Shea family and that in excess of
$119,000 was deposited into the "household account". Respondent
disallowed deductions for some expenditures from the business
account because he determined that these expenditures were
personal expenses of the Shea family not properly deductible as
business expenses. But this position supports petitioner's
argument that profits were used to pay community debts.
Respondent points out in arguing for disallowance of claimed
business deductions that Mrs. Shea directly benefited from some
of these expenditures. Indeed, our findings which sustain
respondent's disallowance of claimed business deductions were in
part based on respondent's analysis indicating that some of the
expenditures from that business account, which were claimed as
business deductions, were apparently spent for personal expenses
of the Shea family. Examples of such expenditures from the
business account in 1992 include the purchase of airline tickets
for Mrs. Shea, B. Alvarez, Margreite Alvarez, and Trudy Daly.23
Also, in disallowing petitioner's claimed business deductions for
1992, we noted the possibility that some of them might have been
23The Shea family took a vacation cruise on the Regal
Princess from Dec. 29, 1991, to Jan. 4, 1992. On Dec. 28, 1991,
petitioner stayed in Fort Lauderdale, Florida. Mrs. Shea's
airline ticket from San Jose to Fort Lauderdale purchased on Dec.
27, 1991, was deducted as a business expense.
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