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C.10 Respondent initially disallowed all of petitioners’ claimed
“Other expenses” for 2000, but subsequently conceded $1,387.44.
See supra note 1. Petitioners also deducted on their 2000 joint
Form 1040 expenses incurred in taxable years 1998 and 1999. See
supra note 2.
On their 2001 joint Form 1040, petitioners claimed a net
loss of $21,826 from Hansie Productions.11 Specifically,
petitioners reported $6,839 in gross receipts and did not claim
any CGS. Petitioners claimed $28,665 in total expenses.12
10The total expenses consisted of: (1) “Advertising” of
$3,969; (2) “Supplies” of $6,902.80; and “Other expenses” which
included (1) “Occupational Professional Organization Dues” of
$350; (2) “Travel to secure distributers; customers” of
$2,497.69; (3) “Business management consultant” of $887;
(4) “Post Office Box (64) Website (432)” of $496;
(5) Professional magazines books: Trade” of $410; (6) “Disabled
Worker Impairment Expenses Necessary for proprietor to work” of
$4,590; (7) “expense required to satisfactorily perform work” of
$3,154; and (8) “Incidental supplies consumed in tax year” of
$2,680.
11Mr. Jackson reported on his Schedule C a net profit of
$1,294 from “1099 MISC INCOME”. As a result, line 12 of
petitioners’ 2001 joint Form 1040 lists $20,532 as their net
business loss.
12The total expenses consisted of: (1) “Advertising” of
$2,670; (2) “Car and truck expenses” of $203; (3) “Interest” of
$934; (4) “Rent or lease” of $1,428; (5) “Meals and
entertainment” of $54; (6) “Legal and professional services” of
$75; and “Other expenses” which included (1) “DONATED BOOKS TO
LIBRARY” of $6,029; (2) “DISABLED WORKERS IMPAIR” of $5,200;
(3) “PO RENT” of $64; (4) “PROFESSIONAL ORG DUES” of $490;
(5) PROFESSIONAL TRADE MAG” of $410; and (6) “WEBSITE” of $2,900.
The Court notes that the listed “Other expenses” total
$15,093, not $23,301 as was listed on line 27, Other Expenses, of
(continued...)
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