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to the two-percent floor imposed by section 67(a).
In the 2004 Schedule A, petitioners claimed $2,300 of
unreimbursed employee expenses, which they identified in that
schedule as “UNION DUES, ACCOUNTING JOU”. As required by section
67(a), petitioners reduced those expenses by two percent of their
adjusted gross income (i.e., by $1,751). In determining the
taxable income reported in their 2002 return, petitioners de-
ducted the balance (i.e., $549), as well as the other itemized
deductions claimed in the 2004 Schedule A that were not subject
to the two-percent floor imposed by section 67(a).
In the 2001 Schedule C, petitioners made no entries in the
section entitled “Income”. In that schedule, petitioners claimed
total expenses of $5,661 consisting of $2,496 for “Depreciation
and section 179 expense deduction” with respect to a “RAM VAN”
(Dodge van), $1,125 for “Insurance”, and $2,040 for “Other
expenses”. Under “Other Expenses”, petitioners claimed $240 for
“BANK CHARGES”, $200 for “GASOLINE EXPENSES”, and $1,600 for
“REPAIR OIL TIRES REGIST”. In the 2001 Schedule C, petitioners
claimed a net loss of $5,661. In determining the taxable income
reported in their 2001 return, petitioners deducted that net
loss.
In the 2002 Schedule C, petitioners claimed gross receipts
or sales of $3,216, cost of goods sold of $15,500, and a negative
gross income of $12,284. In that schedule, petitioners also
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Last modified: November 10, 2007