- 5 -
2000 2001
Cost of goods sold1 $2,100 -0-
Deductions
Car 7,634 $10,284
Insurance 33 33
Legal -0- 772
Supplies 626 1,001
Utilities 763 900
Publications 100 100
Postage 154 71
Training, etc. 244 614
Advertising2 82 -0-
1 Claimed with respect to Galaxy.
2 Claimed with respect to Galaxy.
These deductions are based on the assumption that petitioner
operated a trade or business of being a housing hearing officer
for the county under CSCI. During the trial, the parties agreed
that Galaxy was a conduit; the income should not have been
reported, and the deductions claimed, other than those stated for
the year 2000 and the amounts paid to petitioner’s mother, were
not allowable.
Discussion
A. Deductions
Section 162 allows a deduction for “all the ordinary and
necessary expenses paid * * * during the taxable year in carrying
on any trade or business”. Similarly, section 212 allows
deductions for ordinary and necessary expenses incurred “for the
production or collection of income.” On the other hand, “no
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Last modified: May 25, 2011