- 9 - Petitioners base the amount of the Schedule C car expense on estimates they made after the mileage was incurred--the only documentary evidence provided by petitioners is a summary prepared in anticipation of trial and dated several years after the actual use of the car. Petitioners likewise did not present any reliable substantiation of the commission, fee, and supply expenses reported on their Schedule C. We conclude that petitioners have not substantiated these expenses and therefore are not entitled to any deductions therefor. Secs. 274(d), 6001.3 Petitioners admit that the car and truck expense on the Schedule C is the same expense that is listed as a miscellaneous itemized deduction. Petitioners are not entitled to a miscellaneous itemized deduction for this expense for the same reasons that they are not entitled to the Schedule C deduction. The remaining deductions claimed by petitioners are the miscellaneous itemized deductions for the professional fees, copying expense, telephone expense, and safe deposit box. Because these expenses total less than 2 percent of petitioners’ 3Based on our holding, we need not reach respondent’s argument that petitioner was not engaged in the research activity for profit within the meaning of sec. 183(a). See also Commissioner v. Groetzinger, 480 U.S. 23, 35 (1987) (stating that a taxpayer is engaged in a trade or business if the taxpayer is involved in the activity with the primary purpose of making a profit). Likewise, we need not consider whether the research expenses were startup expenditures under sec. 195(c).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011