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Respondent determined a deficiency in petitioner's 1993
Federal income tax in the amount of $6,426. The issue for
decision is whether petitioner is entitled to various deductions
claimed on a Schedule C included with her 1993 Federal income tax
return. The resolution of this issue depends upon whether,
during 1993, petitioner's dog breeding activity constituted a
trade or business within the meaning of section 162.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
Petitioner filed a timely 1993 Federal income tax return. On
that return, petitioner computed her taxable income and Federal
income tax liability in accordance with the cash receipts and
disbursements method of accounting. At the time that the
petition was filed, she resided in Omaha, Nebraska.
During 1993 petitioner was employed as a building
official/inspector by the City of Gross Pointe Woods, Michigan.
Her work schedule was somewhat irregular; however, she routinely
worked between 40 and 60 hours per week. She received and
properly reported wage income in the amount of $40,306 from this
employment.
As of the date of trial, petitioner had been involved in
breeding and showing Pomeranian dogs for over 30 years. Her
interest in Pomeranian dogs arose when she was only 10 years old.
For Federal income tax purposes, in 1989 she and her former
husband began reporting income earned and expenses paid in
connection with this activity on Schedules C included with their
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