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On the basis of Michael Friscia’s testimony, the canceled
checks, and banking records we are convinced that Friscia
Construction was conducting a legitimate construction business and
necessarily had a variety of expenses in connection with such
operations, which would be allowable as deductions herein.
Friscia Construction was thus entitled to some amount of
deductions under section 162(a) in connection with the business.
See Cohan v. Commissioner, 39 F.2d 540 (2d Cir. 1930). Michael
Friscia provided specific testimony at trial about the company’s
construction projects for the year, and we find a majority of the
claimed expenses to be consistent with these activities.
Upon our detailed review of the record we find that Friscia
Construction is entitled to costs of goods sold and deductions for
the 1995 taxable year as follows:
Costs of goods sold $135,645
Wages1 68,756
Licenses 220
Advertising 150
Accounting 650
Truck maintenance/gas 4,375
Supplies 198
Dues 1,759
Insurance 4,743
Office expense 736
Telephone 5,683
Legal fees 2,500
Bank charges 132
Vehicle depreciation 4,249
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Total 229,796
1The deduction for wages reflects a concession by
respondent, to which petitioner agrees.
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