- 5 - petitioners reported $327.79 in gross sales and claimed cost of goods sold (CGS) of $19,887.57. Respondent allowed only $1,520 of the claimed CGS.6 To substantiate their CGS, petitioners presented at trial an invoice from Steck-Vaughn Co., dated April 21, 1998, for 1,000 copies of Champions of Change (Biographies of Famous Black Americans), for a total cost of $2,359.85. Petitioners also presented an invoice from Winston Derek Publishers Group, Inc., dated February 8, 1999, for a total cost of $525.56 for 56 copies of Howling Against the Wind. Additionally, petitioners presented Travelers Express Co., Inc. Drawers (Travelers Express) receipts with a combined total of $707.7 The Travelers Express receipts, which provided only the date and amount, contained handwritten 5(...continued) Kelvin Jackson’s (Mr. Jackson) 2000 Schedule C-EZ, Net Profit From Business, and 2001 Schedule C deductions are not at issue. Accordingly, all references to Schedule C deductions are to those for Hansie Productions. Mr. Jackson reported on his 2000 Schedule C-EZ a net profit of $3,348.45 from his business of “News Paper [sic] Deliverer”. As a result, line 12 of petitioners’ 2000 joint Form 1040 lists $42,147.82 as their net business loss. 6Respondent’s notice of deficiency indicates that $18,367 of the claimed $19,887.57 CGS was disallowed in 2000, which would leave $1,520.57 as allowable. The Court notes that amount should have been rounded to $1,521, not $1,520. 7The Travelers Express receipts were dated Dec. 27, 1999, and Mar. 10 and 19 and Aug. 25, 2000, bearing amounts of $57, $200, $200, and $250, respectively.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NextLast modified: March 27, 2008