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With respect to petitioners’ substantial authority argument
as it relates to Mr. Hopkins’s claimed Schedule C deduction of
$67,084, petitioners’ treatment in their 1999 joint return of Mr.
Hopkins’s automobile racing expenditures of $67,084 is different
from the position they are now advancing with respect to such
expenditures. In petitioners’ 1999 joint return, petitioners
included Mr. Hopkins’s automobile racing expenditures of $67,084
as part of the nonpassive loss of $103,150 from Mr. Hopkins’s S
Corporation that they claimed in petitioners’ Schedule E.25
Petitioners concede that that treatment was wrong. See supra
note 14. On the record before us, we reject petitioners’ sub-
stantial authority argument as it relates to Mr. Hopkins’s
claimed Schedule C deduction of $67,084.
With respect to petitioners’ substantial authority argument
as it relates to Mr. Hopkins’s S Corporation’s claimed advertis-
ing expense deduction of $3,130 and Mr. Hopkins’s S Corporation’s
claimed promotional expense deduction of $39,000, we find that
all of the authorities on which petitioners rely to support
entitlement to those deductions are materially distinguishable
24(...continued)
“failed to provide sufficient evidence that the Sole Proprietor-
ship or Subchapter S Corporation’s treatment of any item was not
supported by substantial authority.”
25The balance of the nonpassive loss of $103,150 from Mr.
Hopkins’s S Corporation that petitioners claimed in petitioners’
Schedule E consisted of Mr. Hopkins’s S Corporation’s claimed
1999 ordinary loss of $36,066.
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