Tod McMullen and Robin Everson - Page 5




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          printer for $287 and a 1972 Dodge van1.                                     
               Petitioners’ 1995 joint Federal income tax return was timely           
          filed.  Petitioners did not elect to itemize deductions for                 
          1995.  Included with that return is a Schedule C for petitioner’s           
          business, identified as Micron Systems.  The primary business               
          of Micron Systems is described on the Schedule C as                         
          “developing/improving patentable products”.  The following                  
          items are reported on the Schedule C:                                       
          Income                                                                      
          Gross receipts                     $492                                     
          Returns/allowances                 330                                      
          Cost of goods sold            3,502                                         
          Gross income                  (3,340)                                       
          Deductions                                                                  
          Advertising                        $320                                     
          Car and truck                 1,264                                         
          Depreciation/sec. 179                                                       
          expense deduction             10,312                                        
          Insurance                          533                                      
          Office                        1,565                                         
          Rent/lease                    3,240                                         
          Supplies                      1,008                                         
          Taxes/licenses                     60                                       
          Meals/entertainment                641                                      
          Utilities                          181                                      
          Other                         1,020                                         
          Total expenses                20,144                                        
          Net Loss                      23,484                                        


               1 According to the Form 4562, Depreciation and Amortization,           
          included with petitioners’ 1995 joint Federal income tax return,            
          the cost of the van was $2,189.  According to the parties’                  
          stipulation, the cost of the van was $952.                                  




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