John Arthur & Patricia Mulholland Beecroft - Page 6




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               Expenses which are ordinary and necessary to carrying on a             
          trade or business generally are allowed as a deduction in the               
          year in which they are paid.  Sec. 162(a).                                  
               Petitioner testified that he was engaged in a business                 
          activity named John Beecroft Sales.  His testimony concerning               
          this alleged activity can be summarized as follows.  The                    
          business, started in 1990, involved sales of electronic parts,              
          primarily computer-related.  He incurred various expenses in                
          traveling throughout California to deliver parts to customers.              
          In total, he spent approximately 10 to 15 percent of his time on            
          this business.  The bulk of the work took place on weekends.  The           
          business has incurred losses in each year since its inception in            
          1990.                                                                       
               We find that petitioner was not engaged in the trade or                
          business of selling electronics outside his primary employment as           
          a salesman at Steven Engineering.  We need not address whether              
          the activity was engaged in for profit under section 183 (or the            
          other issues raised in the notice of deficiency) because we find            
          that petitioner was not engaged in the sales activity.                      
               The primary evidence in the record concerning such an                  
          activity is petitioner’s own testimony.  We do not find his                 
          testimony to be credible, and we therefore do not accept it.  The           
          only corroborating evidence is in the form of “mileage logs” and            
          an assortment of receipts.  The mileage logs (actually pages of a           






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