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This Court must decide: (1) Whether petitioners
substantiated Schedule A medical expenses of $6,393, Schedule A
interest expenses of $3,165, a net operating loss carryover of
$16,505, Schedule C expenses of $6,260 related to an
attorney/sales consultant activity, Schedule C expenses,
including cost of goods sold, of $3,433 related to an antiques
and jewelry activity, and Schedule C expenses of $26,927 related
to an oil and gas activity; (2) whether petitioners are liable
for self-employment tax on the income from their Schedule C
activities and are entitled to the corresponding deduction; and
(3) whether petitioners are liable for the accuracy-related
penalty. If petitioners' itemized deductions are less than the
standard deduction, petitioners will be entitled to the standard
deduction under section 63(b).
Some of the facts in this case have been stipulated and are
so found. Petitioners resided in Bradenton, Florida, at the time
they filed their petition.
In 1995, Paul Emerson (petitioner), an attorney, was engaged
in the business of an "Attorney/Sales Consultant" and in the
business of "Sales-Antiques & Jewelry". As an attorney/sales
consultant, petitioner worked with others and anticipated
becoming the general counsel of an Ohio corporation. Petitioner
worked from home. During 1995, Jane Emerson (Mrs. Emerson) was
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