- 13 - $743,561 from a business described as “international transportation - aircraft” composed of the following: Advertising $106 Legal and professional service 11,662 Office expense 112 Travel 80,883 Meals and entertainment (less 20 percent) 436 Other direct cost of sales 650,000 Investment research 320 Misc. 27 Bank charges 15 Net loss $743,561 Petitioners Christopher and Kim Shea also filed a joint Federal income tax return for 1992. On a Schedule C to that return, Christopher reported negative gross income of $150,000 from a business described as “international transportation”, consisting solely of cost of goods sold in that amount. In notices of deficiency, respondent determined that petitioners had not shown that their Schedule C activity was a trade or business and disallowed their respective losses. Petitioners filed timely petitions contesting respondent’s determination and alleging, in the alternative, that the Schedule C losses were deductible under section 165, 166, or 1244. OPINION Petitioners contend that they are entitled to deduct the losses claimed on their respective Schedules C because they were engaged in the trade or business of “internationalPage: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
Last modified: May 25, 2011