- 21 - 10. Conclusion We conclude that petitioners may not deduct more Schedule C expenses for petitioner’s consulting activity for the years in issue than allowed by respondent.3 D. Whether Petitioners Are Entitled to More Itemized Deductions Than Respondent Allowed 1. Susan Fairey’s Employee Business Expense Deductions Petitioners contend that they may deduct unreimbursed employee business expenses of $2,277.90 for 1999, $2,686.49 for 2000, and $965.37 for 2001 for Susan Fairey.4 Petitioners contend that it is reasonable for them to deduct those amounts because they equal 28 percent of petitioners’ total expenditures for 1999, 30 percent for 2000, and 16 percent for 2001.5 We disagree. Petitioners have not given any convincing justification for basing their deductions on these percentages. Hughs asked petitioners how much Susan Fairey spent for her classroom. Petitioners did not timely produce any records except some canceled checks payable to retailers that sell items that 3 In light of this conclusion, we need not decide whether petitioner operated his consulting activity for profit. 4 Teachers may deduct up to $250 for unreimbursed education expenses as above-the-line deductions for tax years beginning in 2002 or 2003. Sec. 62(a)(2)(D). For the years in issue, those expenses were deductible only to the extent unreimbursed employee business expenses and other itemized deductions exceeded 2 percent of adjusted gross income. 5 The total of petitioners’ business expenditures for 2001 is not in evidence.Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Next
Last modified: May 25, 2011