- 7 -
Internet services 168
Membership fees 404
Parking and tolls 1,827
Photography 2,037
Postage 1,785
Professional development 245
Subscriptions and publications 702
Telephone 5,217
Total 77,267
Petitioner claims that ASIL Investments was a real estate
investment business that she began while she worked full time at
Versata, Inc. Petitioner testified that she took a number of
courses and looked at a variety of properties in 2002.
Petitioner testified that she made some offers on properties;
however, she provided no other evidence of these offers. There
is no evidence that petitioner ever completed a purchase of
property. Petitioner received no income from ASIL Investments in
2002 and abandoned the venture early in 2003.
If any of the expenses incurred by petitioner were in
relation to a real estate investment venture, they appear to be
in the nature of investigating the business potential of creating
a real estate investment business or preparing to start such a
business. In order to deduct expenses under section 162, the
expenses must relate to a functioning business at the time the
expenses were incurred. Glotov v. Commissioner, supra.
Section 195(a) provides: “Except as otherwise provided in
this section, no deduction shall be allowed for start-up
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Last modified: March 27, 2008