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Shirley, Long Island. Petitioner did not lease any of those
properties to tenants during 1996-98.
Petitioner’s Returns
For each year in issue, petitioner filed a Form 1040, U.S.
Individual Income Tax Return, showing zero taxable income and no
tax due. On a Schedule C attached to each of those returns,
petitioner listed as his principal business or profession
“research and development” and as the name of his business
“A.S.K. Enterprises”. Only the 1999 and 2000 Schedules C listed
a business address, which was 30 E. 3d St., Bethlehem, PA 18015
(the Bethlehem property). All of the Schedules C report zero
gross receipts and zero gross income, and they report the
following amounts of total expenses (and resulting losses):
Year Schedule C Expenses
1996 $72,786
1997 75,388
1998 80,675
1999 85,845
2000 80,020
The Notice
The notice disallows all of petitioner’s 1996-98 reported
Schedule C expenses and a portion ($33,945 for 1999 and $40,113
for 2000) of those expenses for 1999 and 2000. Those
disallowances are based upon respondent’s determination that
petitioner failed to establish that he “incurred or, if incurred,
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