- 6 - 1. Petitioners’ Amway Distributorship Was Not an Activity Engaged in for Profit During 1996 and 1997 Petitioners filed Schedules C, Profit and Loss From Business, with their 1996 and 1997 Federal income tax returns and reported the following: Income 1996 1997 Gross receipts $150 $84.63 Less: cost of goods sold -0- -0- Gross income 150 84.63 Expenses Car and truck $8,866 $12,119 Commission and fees 28 -0- Legal and professional services 300 300 Travel 45 380 Meals and entertainment 305 437 Other expenses1 2,358 2,545.39 Total expenses 11,902 15,781.39 Total net losses (11,752) (15,696.76) 1The “Other expenses” claimed for 1996 were: Monthly seminars (11 seminars at $28 each) $308 Quarterly conferences (3 conferences at $130 each, plus food and lodging) 840 Tapes, catalogs, business support 850 Cell phone (basic) 360 The “Other expenses” claimed for 1997 were: Monthly training seminars (tickets) $308 Quarterly conferences (3) 470 Training tapes and business support 1,767.39 In the notices of deficiency for 1996 and 1997, respondent determined that petitioners’ Amway activity did not satisfy requirements for carrying on a business, and that the expensesPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011