Michael D. and Suzan L. Storer - Page 13

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          maintained solely for the purpose of substantiating their                   
          considerable losses and not as a means for tracking costs so as             
          to reduce business-related expenses.  The extensiveness of the              
          records would be more meaningful if these records illustrated               
          that petitioners were tracking expenses while, at the same time,            
          making a bona fide effort to grow their photography enterprise.             
          These records primarily show us that petitioners were adept at              
          acquiring the latest digital photography technology and supplies.           
          What is conspicuously missing, however, is a same level of                  
          extensive detail showing expenses and activities specifically               
          geared at growing the business.  For example, petitioners spent             
          thousands of dollars on digital cameras and supplies, yet                   
          believed that it was unnecessary to spend more than $250 (which             
          included a $95 ad placed in the back of the local high school               
          yearbook) on the basic staples of marketing a business such as              
          advertisements, a listing in the yellow pages, or brochures.                
          Although petitioners submitted an extensive portfolio of flyers             
          as an exhibit, they admitted that the portfolio was not created             
          until shortly before time of trial.  Petitioners continually cite           
          activities such as additional sales made in storefronts, which              
          purportedly occurred in 2003 and 2004.  Not only did petitioners            
          not provide any evidence of these activities, but these years are           
          not in issue.  The Court is concerned only with petitioners’                

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Last modified: November 10, 2007