T.C. Memo. 2004-199
UNITED STATES TAX COURT
VANESSA K. BERNARDO, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 16655-02. Filed August 31, 2004.
During 1999, P and her daughter, M, formed an
unincorporated venture, V, as the vehicle for pursuing
M’s career as a singer and recording artist. P
provided the financing for the venture. P and M orally
agreed to a 50-50 division of any profits. P believed
that, under that agreement, her profit participation
would terminate when she had received sufficient profit
distributions to fully reimburse her for all
expenditures on behalf of V. R alleges that P did not
participate in the activities of V for profit.
Therefore, pursuant to sec. 183, I.R.C., R denies that
P is entitled to deduct any of her 1999 expenditures on
behalf of V. R also alleges that P is not entitled to
deduct her 1999 expenditures for (1) clothing that her
employer required her to wear for work or (2) tax
preparation fees that she failed to substantiate. R
also denies that P is entitled to either a dependency
exemption for M or head of household filing status for
1999. R also determined that P is subject to the sec.
6662, I.R.C., accuracy-related penalty.
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