- 4 -
Professional fees $154
Copying expense 449
Telephone expense 180
Car expense 2,200
House expense 24,000
Safe deposit box 15
Total $26,998
Petitioners also argue that they are entitled to the business
expenses claimed on the Schedule C--car and truck expense of
$2,200, commission and fee expense of $10, and supply expense of
$450.
Respondent bears the burden of proof with respect to the
increased deficiency. Rule 142(a)(1). However, we decide this
case based on the record, without regard to the burden of proof.
See sec. 7491(a).
A corporation formed for legitimate business purposes is an
entity separate from its shareholders, and the business of the
corporation is separate and distinct from the business of its
shareholders. Moline Props., Inc. v. Commissioner, 319 U.S. 436,
438-439 (1943); Deputy v. du Pont, 308 U.S. 488, 494 (1940).
Consequently, a shareholder generally is not entitled to a
deduction for the payment of corporate expenses. Deputy v. du
Pont, supra; Hewett v. Commissioner, 47 T.C. 483 (1967). The
Schedule C that petitioners filed with their return listed
petitioner’s corporation, RRI, as the name of his business. To
the extent that the expenses listed on the Schedule C--as well as
the research-related expenses claimed as itemized deductions--
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Last modified: May 25, 2011