- 2 - Respondent determined a deficiency in petitioner’s Federal income tax of $1,695 for the taxable year 1996. The issue for decision is whether petitioner is entitled to deductions for business expenses and to the subtraction from gross receipts for an amount of cost of goods sold. Some of the facts have been stipulated and are so found. The stipulations of fact and the attached exhibits are incorporated herein by this reference. Petitioner resided in San Jose, California, on the date the petition was filed in this case. During 1996, petitioner earned $55,201 in wages from Applied Materials, Inc. and Philips Semiconductors, Inc. He also received $17,727 in pension and annuity income, primarily from military retirement benefits. Petitioner filed a Schedule C, Profit or Loss from Business, with his 1996 Federal income tax return. This schedule listed petitioner as the proprietor of a housekeeping business named “Beverly’s Housekeeping”. The following amounts were reported on the schedule: Gross receipts $ -0- Cost of goods sold (750) Expense deductions Advertising $6,000 Insurance 775 Office expense 1,045 Supplies 350 Meals and entertainment 437 Wages 750 Total (9,357) Net loss (10,107)Page: Previous 1 2 3 4 5 6 7 Next
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