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schedule. However, because the corresponding deduction on Mr.
Brayshaw’s Schedule C has also been disallowed, respondent’s
determination must be adjusted to reflect the fact that Ms.
Brayshaw never received the income reported on her Schedule C.
Mr. Brayshaw’s Schedule C
The second Schedule C listed Mr. Brayshaw as the proprietor
of a business engaged in software development. This schedule
listed the following amounts:
Gross receipts $63,050
Returns and allowances (4,928)
Expenses
Advertising $1,639
Car and truck 1,170
Mortgage interest 1,771
Legal and professional services 225
Office 2,522
Rent/lease - vehicles, machinery, equipment 13,450
Rent/lease - other business property 195
Repairs and maintenance 2,055
Supplies 11,722
Taxes and licenses 478
Travel 2,697
Utilities 3,043
Total expenses (40,967)
Expenses for business use of home (16,196)
Net profit 959
At trial, petitioners effectively abandoned the amounts listed on
this schedule, instead relying on stipulations and evidence to
establish the proper amounts of their deductions. This one
Schedule C is purported to represent the income and expenses of
all three business activities of Mr. Brayshaw.
Mr. Brayshaw’s business activities are rather complex. He
has organized a corporation to conduct one business activity, and
he is involved in three other separate and distinct businesses,
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Last modified: May 25, 2011