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In 2003 and prior years, petitioner’s friend, Sege
Yassievich (Sege), purchased from an Internet domain registrar
numerous Internet domain names. The trial record does not
explain why Sege purchased the Internet domain names or
petitioner’s involvement in Sege’s purchase thereof.
Sege prepared and petitioner timely filed petitioner’s 2003
individual Federal income tax return on which petitioner
described her business as “Internet Publishing” and on which
petitioner claimed, among other things, ordinary deductions for a
$3,050 casualty loss on the theft of a “notebook” and a “digital
camera”, a $2,060 business bad debt, $2,940 in business travel,
$3,850 in contract labor, and $3,699 in depreciation. Also on
her 2003 Federal income tax return, petitioner claimed to have
placed in service in 2003 a $2,100 “PC” and $5,640 in other
assets.
On audit, with the exception of $1,513 of the $3,699 claimed
depreciation expense, respondent disallowed all of the above
deductions claimed by petitioner on her 2003 Federal income tax
return.
The schedule below summarizes the disputed deductions
claimed by petitioner on her 2003 Federal income tax return and
the deductions allowed by respondent:
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Last modified: November 10, 2007