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Respondent determined deficiencies in petitioners’ Federal
income taxes of $5,387 and $3,774 for the taxable years 1996 and
1997.
The issue for decision is whether petitioners’ Amway
activity in 1996 and 1997 was operated for profit such that
petitioners may deduct expenses related to that activity in
amounts greater than those allowed in the notice of deficiency.1
Some of the facts have been stipulated and are so found.
The stipulations of fact and the attached exhibits are
incorporated herein by this reference. Petitioners resided in
Palatka, Florida, on the date the petition was filed in this
case.
From 1992 through 1998, petitioner husband worked 45 hours
per week as a maintenance supervisor for Georgia Pacific
Corporation, while petitioner wife worked as a teaching
assistant. Petitioners both have been involved with an Amway
distributorship since 1989, operating it under the name Minnick
Enterprises.2 Amway, a supplier of various products for personal
1The adjustment in the notice of deficiency to the 1996
medical expense deduction is computational and will be resolved
by the Court’s holding on the issue in this case.
2Petitioner husband stated at trial that petitioners are now
“Quixtar distributors” rather than Amway distributors. Although
the exact nature of the relationship between Amway and Quixtar
remains unclear, Quixtar apparently is a new computerized sales
system which is related to Amway but which is used for both Amway
and nonAmway products. Because petitioners appear to have been
(continued...)
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