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purchases of the boots and safety glasses. Consequently, we
sustain respondent’s determination that petitioners are not
entitled to deductions for any of the other expenses.
Furthermore, petitioners are not entitled to deductions for the
employee business expenses conceded by respondent. Employee
business expenses generally are allowed as deductions under
section 162(a). However, such expenses are miscellaneous
itemized deductions and are allowed only to the extent that the
aggregate of all miscellaneous itemized deductions exceeds 2
percent of adjusted gross income. See secs. 62, 63, 67.
Petitioners’ adjusted gross income was $68,797 in 1994, $68,865
in 1995, and $76,314 in 1996. Petitioners were allowed no other
miscellaneous itemized deductions in any of the years in issue.
Thus, they are not entitled to any deduction for the yearly $705
expense because it does not exceed 2 percent of adjusted gross
income in any year.
The second issue for decision is whether petitioners
received unreported interest and dividend income. Respondent
determined that petitioners received unreported interest income
of $42 in 1994 and unreported dividend income of $80 in 1994 and
$91 in 1995.
Gross income generally includes income from whatever source
derived, including interest and dividend income. Sec. 61(a)(4),
(7). Petitioners admit that they received but did not report the
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