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They did, however, attach a Schedule A, Itemized Deductions, to
report the following unreimbursed employee expenses:
Professional subscriptions $1,098.10
Key man insurance 2,335.00
Personal LC to pay KidsOA bills 50,000.00
Brody’s vehicle expense 5,059.00
DeClerk’s car depreciation expense 1,150.00
DeClerk’s car expense for business use 559.00
Total $60,201.10
Petitioners also attached two Schedules C, Profit or Loss From
Business, to their 1999 tax return. One Schedule C pertained to
petitioner DeClerk’s “Principal Business or Profession” of “Fund
Raising” and reported a depreciation and section 179 expense
deduction of $1,150. The other Schedule C reported petitioner
Brody’s “Principal Business or Profession” as a “Service:
Incubator” and claimed the following expenses as deductions:
Repairs and maintenance $4,367
Office space & expenses paying
for KOA employees 33,911
Interest on funds borrowed to pay KidsOA bills 5,016
Total expenses $43,294
In the notice of deficiency, respondent determined that
petitioners were not entitled to itemized deductions for
unreimbursed employee expenses regarding the key man insurance,
loan, and petitioner Brody’s vehicle expense.5 Respondent also
5 In the notice of deficiency, respondent determined that
petitioners were entitled to an itemized deduction for the
professional subscriptions. As we indicated earlier, petitioners
concede that they are not entitled to itemized deductions for
(continued...)
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