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posttrial brief. In fact, respondent's opening brief expressly
refers to "the property taxes paid by petitioners in 1994, in the
amount of $3,570." As a general rule, this Court will not
consider issues first asserted on brief. See Sundstrand Corp. &
Subs. v. Commissioner, 96 T.C. 226, 346-348 (1991). When issues
are presented in the reply brief only, there is even stronger
reason to disregard them. See Estate of Snarling v.
Commissioner, 60 T.C. 330, 350 (1973), revd. and remanded on
other grounds 552 F.2d 1340 (9th Cir. 1977).
Schedule C Business Loss
Background
On their 1994 joint Federal income tax return, petitioners
reported Schedule C gross receipts of $15,535, and total Schedule
C expenses of $80,337, resulting in a net loss on Schedule C of
$64,802. Petitioners contend that this net loss was attributable
to a trade or business that petitioner husband carried on under
the name of Transnet to provide computer consulting services.
Petitioners also reported on their 1994 joint Federal income
tax return wage income of $180,326. The substitute Form W-2,
Wage and Tax Statement, attached to the tax return attributes
$167,265 of this amount to petitioner husband's employment with
The Application Group, San Francisco, California.
In the notice of deficiency, respondent disallowed
petitioners’ claimed Schedule C expenses in the amount of the
reported net loss (i.e., $64,802). In effect, then, respondent
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