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order to find new products to make. On the New Tech Schedule C,
petitioners reported no income and no inventory. Petitioner
explained this by stating: "Most all of this stuff at that point
is give away stuff you give to people and give away hoping that
they will say, ‘Hey, we like that idea and we're going to do it
with you.’" During 1995, petitioner was also a partner in
Nashville North, LLC, a partnership, the purpose of which was to
promote Greg Shires, a country and western singer, and produce
CDs.
On the New Tech Schedule C, petitioners deducted $4,451 of
their home mortgage interest as rent and $697 of property taxes
as taxes. Petitioners did not elect to itemize their deductions.
Petitioners paid $4,451 in mortgage interest expense and $1,394
in taxes. Respondent disallowed the $4,451 of rent expense and
the $697 of taxes claimed on the Schedule C. Instead, respondent
determined that petitioners are entitled to a $2,922 deduction
for business use of their home. Petitioners agreed with the
determination that they were limited to that deduction for the
business use of their home. We sustain respondent's
determinations that disallowed the rent and tax deductions
claimed by petitioners on the New Tech Schedule C and allowed
petitioners a $2,922 deduction for the business use of their
home.
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Last modified: May 25, 2011