- 5 -
proper place. Furthermore, petitioner is of the opinion that
since he spent some of the income on his writing activity it
should be reported on Schedule C.
The various income items are not properly reportable on
Schedule C pertaining to the writing activity. Indeed, these
income items were derived from separate activities or
transactions apart from petitioner’s writing activity.
Therefore, income from other activities cannot be offset by
expenses from petitioner’s writing activity. The compensation
received from the video production and the lecturing fee are
properly reportable as “Other income” on line 21 of Form 1040.3
The interest income is properly reportable on Schedule B,
Interest and Dividend Income.4
3 For an activity to be considered a trade or business, the
taxpayer must be engaged in the activity with continuity and
regularity. See Commissioner v. Groetzinger, 480 U.S. 23, 35
(1987). The income derived from consulting and lecturing was not
earned from activities in which petitioner engaged with
continuity and regularity. Therefore, this income would not be
reported on separate Schedules C for each activity.
4 After trial, respondent moved to amend his pleadings to
conform to the evidence and to seek an increased deficiency. See
sec. 6214(a); Rule 41. Petitioners had no objection, and the
motion was granted. Based upon respondent’s amendment to answer,
the deficiency for 1993 is unchanged, the deficiency for 1994 is
increased to $2,888, and the deficiency for 1995 is decreased to
$6,362. This is based on the recharacterization of the income
claimed on Schedules C and a pension income adjustment for 1995
in petitioners’ favor. There are also Social Security benefit
adjustments which are computational.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011