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Even before deducting expenses, petitioner derived no
significant income from either of the mental health-related
activities. Petitioner reported gross receipts from videotape
sales of $76 in 1996, for a gross profit of $52 after cost of
goods sold of $24. However, it is unclear how petitioner could
have made this profit. He testified that he sold videotapes, but
he did not explain whether he made these tapes or purchased them
for resale. He also testified that they were available for $20
retail or by mail order for $24. If petitioner purchased and
resold these tapes, it is unclear how his cost of goods sold was
$24 (which would imply only one tape resold at $76). If
petitioner was a sales agent for the manufacturer, it is unclear
how his gross receipts were $76 (with individual sales of $20 or
$24). Petitioner later testified that the videotapes were made
available for sale in a catalog in which they sold for $59.95
each, and for which he received payment of $24 each. This
testimony likewise does not explain petitioner’s gross receipts
and cost of goods sold.
Petitioner also reported gross receipts of $1,320 in 1998.
However, petitioner testified that he was uncertain of the source
of this income and that he had not experienced a “significant
increase” in his sales of videotapes in 1998. Finally,
petitioner reported gross receipts of $10 in 1999. Petitioner
testified that this amount was received as payment for his
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