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6651(a)(1) of $1,053 and $1,556, respectively. The issues for
decision are (1) whether petitioners are entitled to deduct
Schedule C, Profit or Loss From Business, expenses from the real
estate loan business of petitioner Robert D. Braun, and (2)
whether petitioners are liable for additions to tax under section
6651(a)(1) for their 1992 and 1993 taxable years.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time they filed
the petition, Robert D. Braun (petitioner) and Patricia M. Braun
(Mrs. Braun) resided in San Diego, California.
On their Federal income tax returns for 1992 and 1993
petitioners claimed five exemptions--themselves and their three
dependent children. Petitioners' only reported source of income
for support in both taxable years was petitioner's real estate
loan business, the results of which petitioners listed each year
on a Schedule C. On the Schedule C attached to their 1992 tax
return, petitioners reported gross receipts of $24,368 and
deducted claimed expenses of $23,408 (including office expenses
of $5,640 and advertising expenses of $1,975) for a net profit of
$960. On the Schedule C attached to their 1993 tax return,
petitioners reported gross receipts of $31,775 and deducted
claimed expenses of $30,328 (including office expenses of $6,200
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