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Petitioner included two Schedules C, Profit or Loss from
Business (Schedule C), as part of his 2001 return. In one of
those schedules, petitioner showed his “Principal Business or
Profession, Including Product or Service” as “Mexican Restau-
rant”. (We shall refer to that Schedule C as the restaurant
Schedule C.) In the restaurant Schedule C, petitioner showed no
income and claimed total expenses and a net loss of $2,060. The
total expenses claimed in the restaurant Schedule C consisted of
travel expenses of $1,700 and meal and entertainment expenses of
$360.
In the second Schedule C included as part of petitioner’s
2001 return, petitioner showed his “Principal Business or Profes-
sion, Including Product or Service” as “PDA Consulting”. (We
shall refer to that Schedule C as the PDA consulting Schedule C.)
In the PDA consulting Schedule C, petitioner showed no income and
claimed total expenses and a net loss of $15,186. The total
expenses claimed in the PDA consulting Schedule C consisted of
car and truck expenses of $2,860, depreciation and section 179
expense deduction of $1,407, travel expenses of $1,800, meal and
entertainment expenses of $225, and other expenses of $8,894 for
“Contractor/supervisor” services.
In determining the taxable income reported in petitioner’s
2001 return, petitioner deducted the total (i.e., $17,246) of the
respective net losses that petitioner claimed in the restaurant
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