James R. and Janet M. Landrum - Page 3

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               Respondent determined deficiencies in petitioners’ 1996 and            
          1997 Federal income taxes of $4,805 and $6,720, respectively, and           
          an accuracy-related penalty under section 6662(a) for 1997 of               
          $1,344.  The issues for decision are:  (1) Whether petitioners’             
          Amway distributorship was an activity engaged in for profit                 
          within the meaning of section 183; (2) whether petitioners are              
          entitled to claimed Schedule C deductions for expenditures                  
          relating to their Amway activity; (3) whether petitioners are               
          entitled to deduct as charitable contributions amounts in excess            
          of the amounts allowed by respondent; and (4) whether petitioners           
          are liable for an accuracy-related penalty under section 6662(a)            
          for 1997.                                                                   
               Some of the facts have been stipulated and are so found.               
          The stipulation of facts and the attached exhibits are                      
          incorporated herein by this reference.                                      
               When the petition was filed, petitioners resided in Lawton,            
          Oklahoma.  Petitioner James R. Landrum (Mr. Landrum) worked full-           
          time for Goodyear Tire and Rubber Co. (Goodyear) as a quality               
          technician in 1996 and as an alignment specialist in 1997.                  
          Petitioner Janet M. Landrum (Mrs. Landrum) worked full-time as an           
          x-ray technician for Southwestern Medical Center during both                
          years in issue.  Petitioners’ four children were, respectively,             

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