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In any event, Wise paid petitioner a salary or wages totaling
$24,916 during 2002.
From time to time throughout the year petitioner entertained
and/or provided gifts to his clients, clients and independent
contractors of Wise, and other independent contractors of NPC.
As relevant here, the income reported on petitioner’s timely
filed 2002 Federal income tax return includes the wages he
received from Wise and $14,515 of “business income”, the
computation of which is detailed on a Schedule C included with
that return.
The Schedule C identifies petitioner’s principal business as
“investment manager & sale” and shows the accounting method for
the business as “cash”. The $75,929 in commissions received from
NPC is reported as gross income, and as relevant here, the
following deductions are claimed: (1) “Commissions and fees”--
$30,067; (2) “travel, meals, and entertainment”--$7,217;
(3) “donations to non-profit”--$2,750; (4) “bonuses”--$1,500; (5)
“gifts”--$3,690; and (6) “memberships”--$410.
The amount of the deduction for commissions and fees equals
the amount of “override” commissions that petitioner received
from NPC that were first directly deposited into petitioner’s
joint checking account but then, and with the exceptions noted
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Last modified: March 27, 2008