- 8 - We noted that the tax return showed the $24,855 but did not show what items were covered by that amount, nor did it indicate the costs, acquisition dates, and specific business uses of any of these items. When Maria took the witness stand, we urged her to testify about the most expensive items first. After Maria testified about a computer, two desks, a printer, a scanner, a fax machine, and a telephone, including testimony about these items’ original costs, aggregating about $4,000, the following colloquy occurred: THE COURT: How are you going to get to $24,800 some odd dollars if you’re already getting to shall we say small potatoes items like $35 items? THE WITNESS: I don’t have anything to go to $24,000. THE COURT: Are there any other big items that you want to tell us about. THE WITNESS: No, sir. Petitioners did not call their tax return preparer to the witness stand to explain any components of the $24,855 item on the tax return that she had prepared for petitioners to file. From the foregoing, we conclude that there was no foundation for the depreciation claims on petitioners’ 2003 tax return. Nevertheless: (1) Respondent has conceded that Maria had a real Schedule C business and agrees that petitioners are entitled to deduct the net losses from that business against their other income, see supra table 1; (2) petitioners impressed us as beingPage: Previous 1 2 3 4 5 6 7 8 9 10 NextLast modified: March 27, 2008