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On his 2001 Federal income tax return petitioner reported
his income and expenses from the NOAA contract on Schedule C in
amounts as follows:
Income
Gross income $35,222
Cost of goods sold 1,650
Gross profit 33,572
Expenses
Advertising $400
Car & truck 10,389
Insurance 1,572
Mortgage interest 8,520
Legal/professional 360
Repairs/maintenance 2,299
Taxes/licenses 2,730
Utilities 3,690
Other expenses
Postal & shipping 420
Business calls & faxes 1,195
Computer & software
services 425
2,040
Total expenses 32,000
Net profit $1,572
In the notice of deficiency respondent disallowed the
claimed deductions for advertising expenses, car and truck
expenses, legal/professional expenses, and other expenses which
consisted of postal and shipping, business calls and faxes, and
computer and software services on petitioner’s Schedule C for
3(...continued)
dispute as to the amount of petitioner’s income and, the Court
surmises that petitioner was paid for additional services he
performed.
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Last modified: March 27, 2008