William S. Fairey, Jr., and Susan R. Fairey - Page 19

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          exclusively for his consulting activity as required to deduct               
          home office expenses under section 280A(c).                                 
               Petitioners contend that Hughs never asked them for the                
          dimensions of their home or of the space in their home petitioner           
          used for business.  We disagree.  Hughs did so in a letter to               
          petitioners dated July 13, 2001.  We conclude that petitioners              
          may not deduct any amount for utility expenses for the years in             
          issue.                                                                      
               7.   Car and Truck Expenses                                            
               Petitioners deducted car and truck expenses of $3,910 for              
          2000 and $4,209 for 2001 on the Schedules C for petitioner’s                
          consulting activity.  The only evidence on this issue is                    
          petitioner’s testimony that he visited stores that he thought               
          might carry Double Otter’s products.  We conclude that                      
          petitioners may not deduct any car or truck expenses for the                
          years in issue.                                                             
               8.   Depreciation                                                      
               Petitioners deducted depreciation of $11,898 for 2000 on the           
          Schedule C for petitioner’s consulting activity on the basis of             
          his claimed purchase of (a) a computer for $3,999, and (b) an               
          Internet service for $7,899.  There is no evidence that                     
          petitioner paid or is entitled to deduct these amounts.  We                 
          conclude that petitioners may not deduct depreciation for 2000.             







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