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including the returns and allowances and the expenses for
business use of the home. Respondent did not adjust the income
reported on either schedule.
Ms. Brayshaw’s Schedule C
The first Schedule C listed Ms. Brayshaw as the proprietor
of a business engaged in medical consultation. This schedule
listed the following amounts:
Gross receipts $11,400
Expenses
Car and truck $2,018
Depreciation and section 179 expense 2,248
Mortgage interest 5,100
Legal and professional services 45
Office 418
Repairs and maintenance 80
Supplies 150
Taxes and licenses 810
Total expenses (10,869)
Net profit 531
Petitioners have conceded that this schedule should not have been
filed because Ms. Brayshaw had ceased conducting the medical
consultation business by 1996. Allegedly, the gross receipts
listed on the Schedule C are amounts which represented lease
payments made by Mr. Brayshaw to Ms. Brayshaw for use of a
vehicle held by petitioners as community property (a Jeep Grand
Cherokee), and the expenses are related thereto.2
In light of petitioners’ concession, we sustain respondent’s
disallowance of all the deductions claimed with respect to this
2It is unclear how the mortgage interest, office expenses,
and legal and professional services relate to the rental of a
Jeep Grand Cherokee.
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Last modified: May 25, 2011