Robert B. and Betty D. Harris - Page 22




                                       - 21 -                                         

               The third issue is whether petitioners are entitled to                 
          deductions for other Schedule C expenses, for 1994, 1995, and               
          1996, in excess of amounts allowed by respondent.  The remaining            
          Schedule C expenses for each of the years at issue mainly                   
          constitute expenses in connection with petitioner’s business                
          activities at Memphis and Nashville, Tennessee, as well as                  
          certain other various business expenses.  The amounts disallowed            
          by respondent are as follows:                                               

               Expense          1994           1995           1996                    
               Car & truck    $3,840.61      --             $1,722.89                 
               Legal & prof.    980.00       $2,920.00      468.54                    
               Office         –-             –-             125.10                    
               Rent or lease  5,500.00       5,832.62       6,595.00                  
               Supplies       –-             –-             441.11                    
               Travel         7,627.35       6,669.83       3,752.40                  
               Meals & ent.1    385.39       1,385.75       306.31                    
               Other          22,027.29      33,263.81      41,292.48                 
               1 Prior to the 50-percent limitation.                                  
               2 Consists of $751.35 for equipment, $147.39 for                       
               miscellaneous, $358.55 for parking, and $770.00 for dues &             
               publications.                                                          
               3 Consists of $1,965.39 for lodging and $1,298.42 for                  
               miscellaneous.                                                         
               4 Consists of $35.32 for dues & publications, $814.14 for              
               lodging, $90.65 for miscellaneous, $190.40 for parking, and            
               $161.97 for shipping & postage.                                        


               7(...continued)                                                        
          petitioner wife and were written on petitioners’ joint checking             
          account.  Petitioners produced no evidence to show that this                
          cellular phone was used in connection with any business activity            
          of petitioner.                                                              





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