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in both years), shoes (four pairs at $120 each in both years),
hosiery ($36 and $35 per week for 50 weeks in 1996 and 1997,
respectively), and laundry services ($25 and $30 per week for 50
weeks in 1996 and 1997, respectively). Although the remaining
claimed deductions for unreimbursed employment expenses were not
based on estimates, petitioners did not maintain any receipts,
records, or logbooks to prove that these expenses were actually
incurred.
Petitioners owned shares of 15 different mutual funds in
1996 and 16 different mutual funds in 1997. Each mutual fund
passed income through to its shareholders on a net basis, i.e.,
gross income minus operating expenses. In annual reports
distributed to the shareholders, each mutual fund disclosed the
annual operating expenses incurred by the fund. The annual
operating expenses are paid by the mutual funds and are not
expenses of the shareholders. Petitioners claimed investment
expense deductions for a pro rata portion of the annual operating
expenses of the mutual funds. Petitioners also claimed $220 in
1996 for Individual Retirement Account (IRA) maintenance fees.
Petitioners estimate that they spent $2.25 per week for 50
weeks on weekend issues of the Chicago Tribune. Petitioners also
estimate that they sent four letters per year for each different
mutual fund and that they spent $40.32 per letter for typing and
mailing. Petitioners claimed investment expense deductions equal
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Last modified: May 25, 2011