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Petitioner was a self-employed practicing attorney in 2000.
He earned a net profit of more than $16,000 from the practice of
law in 2000.
Petitioner also worked as an actor in 2000. He used the
professional name “Jack Forbes”. In that year, he earned $13,435
from acting and had acting-related expenses of $17,878. He
reported a net loss from acting on a Schedule C, Profit or Loss
From Business, attached to his 2000 return.
During an examination of petitioner’s 1999 return,
respondent allowed petitioner to treat his acting expenses as
adjustments to gross income for 1999.
Respondent determined that petitioner had adjusted gross
income of more than $16,000 in 2000 and that, as a result,
petitioner may not deduct his acting expenses of $17,878 as
adjustments to gross income under section 62(a)(1) and (2)(B).3
OPINION
A. Whether Adjusted Gross Income in Section 62(b)(1)(C)
Includes Only Income From the Performance of Services as a
Performing Artist
1. Background
In computing adjusted gross income, a qualified performing
artist may deduct from gross income employee business expenses
incurred in connection with his or her performance of services in
3 Respondent concedes that these expenses are unreimbursed
employee expenses for 2000.
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Last modified: May 25, 2011