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1990); Nissley v. Commissioner, T.C. Memo. 2000-178; Theisen v.
Commissioner, T.C. Memo. 1997-539; Rubin v. Commissioner, T.C.
Memo. 1989-290; Alcala v. Commissioner, T.C. Memo. 1984-664. In
most of these cases, we found that the expenses of operating the
distributorship at issue were so great in comparison to the
revenue generated that the distributor lacked a true profit
motive. Here, by contrast, respondent asserts that Michelle
Friscia’s Amway distributorship was exceptionally profitable in
that it generated $46,172 in proceeds with no expenses. We find
this implausible, especially in light of the Friscias’ decision
to discontinue the distributorship in 1994.
The Friscias used the 649 account as a business account for
the Amway distributorship, and the transactions therein reflect
the items of income and expense for the Amway business. Michelle
Friscia admitted that after discontinuing the business in mid-
1994, she began to pay personal expenses out of the account.
However, she was able to identify legitimate business
expenditures through her testimony and the bank records. The
Friscias made payments totaling $36,996 to upline distributors
and to Amway in 1994. We find that these payments represented
$36,496 in deductible sales commissions and costs of goods sold.2
2On the basis of Michelle Friscia’s testimony, we find that
$500 of the Amway products purchased in 1994 were for the
Friscias’ personal household use.
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