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amounts of the expenses claimed, but contends they are
nondeductible startup expenditures under section 195(a).6
Petitioner filed her petitions for 1998 and 2001 on July 21
and 15, 2004, respectively. The Court consolidated the cases for
trial, briefing, and decision on December 5, 2005.
OPINION
The relevant portion of section 195, as amended, provides:
SEC. 195. START-UP EXPENDITURES.
(a) Capitalization of Expenditures. Except as
otherwise provided in this section, no deduction shall
be allowed for start-up expenditures.
* * * * * * *
(c) Definitions. For purposes of this section--
(1) Start-up expenditures. The term “start-up
expenditure” means any amount--
(A) paid or incurred in connection with--
* * * * * * *
(iii) any activity engaged in for
profit and for the production of income
before the day on which the active trade
or business begins, in anticipation of
such activity becoming an active trade
or business, and
(B) which, if paid or incurred in connection
with the operation of an existing active trade or
business (in the same field as the trade or
business referred to in subparagraph (A)), would
6 The parties have also stipulated that petitioner is
entitled to personal exemptions for the years at issue. If
additional income tax is owing from petitioner, she concedes the
additions to tax under secs. 6651(a)(1) and (2) and 6654.
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