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OPINION
A. Aviation Expenses
Petitioner concedes that he failed to report gross receipts
in the amounts determined in respondent’s notice of deficiency.
He contends, however, that he is entitled to deduct associated
business expenses not claimed on his returns for the subject
years. He claims that these newly asserted deductions more than
offset the gross proceeds that he omitted from his returns and
that consequently he has no deficiency for any year in issue.
The parties have stipulated that petitioner is entitled to
certain deductions not claimed on his return with respect to both
his aviation activities and the Romer & Co. accounting
business.6 Giving effect to the parties’ concessions and
stipulations results in net losses from petitioner’s aviation
activities for each of the years in issue but indicates positive
net income from petitioner’s other activities. Seeking to
eliminate any remaining net income (and indeed to produce
significant net losses) from his accounting business and other
6 Respondent concedes that petitioner is entitled to the
following Schedule C deductions (including depreciation), which
were not claimed on petitioner’s Federal income tax returns:
Romer & Aviation
Year Co. Activities
1989 $ 99,805 $ 75,049
1990 119,106 91,646
1991 267,257 166,687
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Last modified: May 25, 2011