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The relevant facts may be summarized as follows. On
Schedules C, Profit or Loss From Business, attached to
petitioner’s 2002 and 2003 Federal income tax returns, petitioner
claimed the following deductions:
2002 2003
Car & truck expenses $5,228 $5,100
Advertising 1,000 600
Supplies 1,239 92
Commission & fees 655 73
Insurance 601 350
Legal & professional
services 310 95
Office expenses 948 1,237
Rent of equipment 1,300 1,220
Repairs 550 547
Travel 789 884
Meals & entertainment 124 513
Utilities 683 643
Home office expenses 1,312 682
Respondent disallowed the deductions and determined deficiencies
in petitioner’s 2002 and 2003 Federal income taxes of $2,423 and
$1,980. At the time the petition was filed, petitioner resided
in the Commonwealth of Pennsylvania.
Petitioner is a pharmacist employed by Rite-Aid. In
addition, petitioner testified:
Well, I guess, I give you a comprehensive idea. What I
develop mainly is pharmaceutical product.
* * * * * * *
[B]efore I work for Rite Aid I was a research scientist,
worked for several pharmaceutical companies. That’s what I
have my graduate training in, in this area, and I was an
inventor also. I developed pharmaceutical products,
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Last modified: May 25, 2011