Augusto & Maria Negret - Page 4




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               When the petition in the instant case was filed, petitioners           
          Augusto Negret and Maria Negret (hereinafter sometimes referred             
          to as Maria) resided in Florida.                                            
               During 2003 Maria operated a “Schedule C business” as an               
          Avon representative.  This business will hereinafter sometimes be           
          referred to as Maria’s Avon business.  Table 1 sets forth                   
          pertinent information from the Schedule C relating to Maria’s               
          Avon business, that petitioners attached to their 2003 Form 1040,           
          U.S. Individual Income Tax Return, together with respondent’s               
          adjustments in the notice of deficiency.                                    
                                        Table 1                                       
          Amount    Respondent                                                        
          Schedule C Line Item        Claimed   Determined   Adjustment               
          1.  Gross Receipts Or Sales        $831      $2,888       1$2,057           
          8.  Advertising                   1,350       1,350           -0-           
          Tools                           -0-       1,770        (1,770)              
          9.  Car And Truck Expenses        2,678       2,678           -0-           
          13.  Depreciation                 10,937         -0-        10,937          
          15.  Insurance                     1,180         -0-         1,180          
          18.  Office Expense                  150         150           -0-          
          22.  Supplies                        250         250           -0-          
          24a.  Travel                          885         885           -0-         
          24d.  Meals And Entertainment         352         352           -0-         
          27.  Other Expenses                  540         540           -0-          
          28.  Total Expenses               18,322       7,975        10,347          
          31.  Net Profit Or (Loss)        (17,491)    2(5,087)      212,404          
               1 Petitioners concede this adjustment.1                                                                     
               2 These amounts are not specifically set forth in the notice of2                                                                     
          deficiency but are the computational results of the amounts that are set    
          forth.                                                                      
               The Schedule C shows that Maria’s vehicle was used as                  
          follows in 2003:  7,440 miles for business; 1,250 miles for                 
          commuting; and 2,900 miles for “other”.  Petitioners’ claimed               
          $2,678 car and truck expenses were computed by multiplying 7,440            






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