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At trial, petitioner testified that the amount in issue was
paid to Michael Dean, and she produced a notarized statement
signed by him to that effect. The statement, however, was
conclusory and did not provide any details regarding the manner,
mode or frequency of payment.
Although petitioner admitted that she did not issue a Form
1099-Miscellaneous to Mr. Dean for 2000, we find that petitioner
did incur contract labor expense in that year. The fact that
petitioner was operating two distinct businesses necessarily
required that she have some assistance. Although relatives might
have provided their assistance on a volunteer basis, Mr. Dean did
not fall into that category, and we doubt that he would have
provided his services gratis.
Based on the record as a whole, we hold that petitioner is
entitled to a deduction for contract labor expense in the amount
of $5,000. See Cohan v. Commissioner, supra.
C. Conclusion
Reviewed and adopted as the report of the Small Tax Case
Division.
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