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other bodybuilders, and gave seminars. Some of his poses were
published in bodybuilding publications. Petitioner won awards
and received at least one endorsement from a supplement
manufacturer for which he received supplements valued at $100 per
month. Petitioner's income from this activity, therefore, came
from posing, seminars, publication of his poses, training
bodybuilders, and the supplements from the supplement
manufacturer.
Petitioner reported the income and expenses of his
bodybuilding activity as a trade or business on Schedules C,
Profit or Loss From Business, of his Federal income tax returns.
For the years at issue, petitioner reported the following income,
expenses, and net losses:
1999 2000 2001
Gross income $ 2,405 $ 8,840 $ 3,975
Total expenses 11,771 14,708 14,539
Net loss (9,366) (5,868) (10,564)
In the notice of deficiency, respondent disallowed
deductions of expenses for supplements in the amounts of $4,630,
$4,352, and $4,744, respectively, for the years in question.
Respondent determined that these amounts represented payments for
products that were personal and, therefore, were not deductible
under section 262. No other deductions were disallowed.
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