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appeared, at least on paper, as not directly involved. It is
difficult to tell from the settlement the nature of the $5,500
portion of the monthly payments. At the very least and in
essence, petitioner had the right to earn income in connection
with the bingo operation, and he was successful in protecting
that right from the interference of the Lichtys and perhaps
others. The $5,500 monthly payments were not in exchange for an
equity interest but instead were a cost of continuing the bingo
business operation. Accordingly, we hold that November is
entitled to deduct the $5,500 portion of the payments made to the
Lichtys through their corporate entity for the years under
consideration.
Has Petitioner Shown That $10,350, $35,436, and $35,436 Were
Incurred for Supplies for the 1991, 1992, and 1993 Tax Years,
Respectively?
Respondent disallowed the above-listed amounts due to
petitioner’s failure to substantiate that the amounts were
expended for deductible business supplies. Petitioner did not
offer any evidence at trial regarding these amounts.
Accordingly, respondent’s determination on these items is
sustained.
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