Benjamin O. & Linda L. Agbaniyaka - Page 7




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          claimed total expenses of $2,948 consisting of $1,498 for “Depre-           
          ciation and section 179 expense deduction” with respect to the              
          Dodge van, $1,110 for “Insurance”, and $340 for “Other expenses”.           
          Under “Other Expenses”, petitioners claimed $240 for “BANK                  
          CHARGES”, $50 for “GASOLINE”, and $50 for “INSPECTION & TUNE UP”.           
          In the 2002 Schedule C, petitioners claimed a net loss of                   
          $15,232.  In determining the taxable income reported in their               
          2002 return, petitioners deducted that net loss.                            
               In the 2003 Schedule C, petitioners claimed gross receipts             
          or sales of $1,372, cost of goods sold of $6,686, and a negative            
          gross income of $5,314.  In that schedule, petitioners also                 
          claimed total expenses of $2,310 consisting of $898 for “Depreci-           
          ation and section 179 expense deduction” with respect to the                
          Dodge van, $980 for “Insurance”, and $432 for “Other expenses”.             
          Under “Other Expenses”, petitioners claimed $262 for “BANK                  
          CHARGES”, $50 for “GASOLINE”, $50 for “INSPECTION & TUNE UP”, and           
          $70 for “REGISTRATION 140 TWO YRS”.  In the 2003 Schedule C,                
          petitioners claimed a net loss of $7,624.  In determining the               
          taxable income reported in their 2003 return, petitioners de-               
          ducted that net loss.                                                       
               In the 2004 Schedule C, petitioners claimed gross receipts             
          or sales of $200, cost of goods sold of $3,570, and a negative              
          gross income of $3,370.  In that schedule, petitioners also                 
          claimed total expenses of $3,013 consisting of $898 for “Depreci-           







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