Karen Boyd - Page 3




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            Corolla that she used for all her transportation needs, including                          
            business travel, commuting to work, and personal use.  Petitioner                          
            did not maintain a mileage log or diary of miles driven in 1997.                           
                  Petitioner timely filed her 1997 Federal income tax return.                          
            Petitioner reported on Schedule C, attached to her 1997 return,                            
            gross income from Boyd PC Consulting of $7,520.  Petitioner                                
            claimed the following Schedule C expenses:                                                 
                  Expense                       Claimed                                                
                  Advertising                   $1,490                                                 
                  Car and truck                 2,347                                                  
                  Depreciation                  205                                                    
                  Repairs/maintenance           1,200                                                  
                  Travel, meals & enter-     2,620                                                     
            tainment                                                                                   
                  Other                         4,000                                                  
                  Total                         $11,862                                                
            On the Vehicle Expense Worksheet, attached to her 1997 return,                             
            petitioner reported 12,500 total miles driven in 1997.  Of that                            
            amount, 7,450 miles were reported to be used for business                                  
            purposes.  Petitioner claimed a car and truck expense of $2,347                            
            based on the purported 7,450 business miles multiplied by the                              
            standard mileage rate of $0.315 per mile.                                                  
                  In the notice of deficiency respondent disallowed the above                          
            Schedule C expense deductions in their entirety because                                    
            petitioner failed to show that each claimed deduction was an                               
            ordinary and necessary business expense, or, in the alternative,                           
            because petitioner failed to substantiate that she paid or                                 
            incurred the expense for which the deduction was claimed.                                  





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