- 47 -
part of the bulk purchasing for the buyers group. Petitioners
have failed to establish that the cost of the pinball machine is
deductible in 1992.
7. Dishonored Checks
Of the $58,971 respondent allowed for purchases in 1992,
checks totaling $18,130 were dishonored due to insufficient
funds. Petitioners concede that, in computing the amount of
income for 1992, the amount of purchases allowed by respondent
for 1992 should be reduced by $18,130.
8. Star Account Miscellaneous Expenses
Respondent reduced gross receipts for 1991 and 1992 for all
miscellaneous charges made against the Ameritrust account.
Respondent did not reduce the gross income to reflect the $885.86
miscellaneous expenses from the Star Bank account. Star Bank is
the successor to Ameritrust. The Star Bank account is the same
account as the Ameritrust account. We see no reason why the
charges should be treated differently. We find, therefore, the
gross receipts for 1992 should be reduced by $885.86.
F. Conclusion
Rounding the amounts above to the nearest dollar, we find
that petitioners are entitled to deduct additional purchases of
$52,680 in 1991 and $10,313 in 1992 computed as follows:
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