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yard, did laundry, and shopped for food and supplies for the day
care activity. Mrs. Willits would operate the day care for about
48 weeks per year, allowing herself time for vacation.
During 1993, Mrs. Willits cared for three infants. She
charged $100 per week for each child. The kitchen, family room,
and backyard were allocated to the day care activity. When the
children napped, they would do so in the den, the spare bedroom,
and the master bedroom. The children would play in the enclosed
backyard where there were toys and playground equipment. Mrs.
Willits hired a gardener to maintain the yard.
On her Schedule C, filed with petitioners’ joint return for
1993, Mrs. Willits reported $14,200 in gross receipts and claimed
the following expenses:
Expense Amount
Advertising $165
Car and truck 987
Depreciation 217
Insurance 600
Legal & profl. 300
Office 350
Supplies 450
Dues and pubs. 140
Laundry and cleaning 1,200
Business gifts 250
Diapers/baby supplies 945
Food 2,700
Yard maint. 1,250
Telephone 390
Total 9,944
Mrs. Willits also claimed a deduction of $3,437 for business
use of home on attached Form 8829. Mrs. Willits’ net profit from
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Last modified: May 25, 2011