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Respondent determined a deficiency of $2,272 in petitioner’s
Federal income tax for the year 2001. The sole issue for
decision is whether petitioner is entitled to deductions for
certain expenses claimed on Schedule C, Profit or Loss From
Business, for the year in question in excess of amounts allowed
by respondent.
Some of the facts were stipulated. Those facts, with the
annexed exhibits, are so found and are made part hereof.
Petitioner’s legal residence at the time the petition was filed
was San Francisco, California.
During the year 2001, petitioner was an employee of the U.S.
Postal Service. Petitioner was also engaged in a self-employed
trade or business activity that he called Innovative Financial
Services. The activity was described as “negotiation and other
services for business/individuals”.
On Schedule C, which petitioner included with his 2001
Federal income tax return, he reported the following gross income
and expenses from this activity:
Income $ 1,200.00
Expenses:
Legal and professional $ 300.00
Office expenses 6,659.04
Rent (business property) 3,500.00
Taxes/licenses 200.00
Meals/entertainment 24.65
Utilities 544.78
Wages 3,600.00 14,828.47
Loss ($13,628.47)
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Last modified: May 25, 2011