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Arlene Jackson (Mrs. Jackson) established her sole
proprietorship Hansie Productions Health Education & Research
(Hansie Productions) in July 1999. On October 22, 1999,
Mrs. Jackson received a $10,000 loan from Business Invest in
Growth (BIG) to fund the startup costs of Hansie Productions.
According to the terms of the loan, $6,500 was to be used to
purchase inventory, and $3,500 was to be used as operating
capital. On Schedule C of petitioners’ 2000 joint Form 1040,
U.S. Individual Income Tax Return, line H was checked to indicate
that Hansie Productions’ business was started during the 2000
taxable year.
Hansie Productions provides health education and health and
arts programming, conducts health research studies, and publishes
and distributes books, pamphlets, brochures, and bookmarks.
Hansie Productions provides classes and counseling on abstinence,
drugs, and alcohol to middle schools and high schools in Texas.
Mrs. Jackson is the author of several books, including Ain’t No
Half Steppin’, Champions of Change (Biographies of Famous Black
Americans), and Howling Against the Wind.
Petitioners’ 2000 joint Form 1040 was received by respondent
on October 16, 2001. On Schedule C petitioners claimed a net
loss of $45,496.27 for Hansie Productions.5 Specifically,
5The only Schedule C deductions that are at issue for
taxable years 2000 and 2001 are those from Hansie Productions.
(continued...)
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