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Petitioners reported the results of the financial planning
business on the Schedule C. Petitioners computed the taxable
income of the financial planning business under the cash receipts
and disbursements method of accounting. The Schedule C reports
gross receipts of $424,497 and net profit of $203,020.
In part, respondent’s determination of a deficiency in tax
results from the following adjustments (disallowances) of
deductions claimed on the Schedule C:
Depreciation $34,726
Meals & entertainment 40,000
Office expenses 24,091
Rental expenses 18,247
Travel 17,584
Seminars 15,260
Presentations 12,675
On brief, petitioners concede the following: (1) the
correctness of respondent’s disallowance of any deduction for
travel, (2) the correctness of a portion of respondent’s
disallowance of a deduction for depreciation, (3) the correctness
of a portion of respondent’s disallowance of a deduction for
office expenses, (4) that the amounts claimed for “seminars” and
“presentations” are amounts paid for meals and entertainment,
which are subject to the 50-percent disallowance rule of section
274(n), and (5) the correctness of a portion of respondent’s
disallowance of a deduction for meals and entertainment
(including the amounts claimed for “seminars” and
“presentations”).
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Last modified: May 25, 2011