Taxpayer did not demonstrate that he engaged in business for profit or that expenses were appropriate and necessary for the business to allow him to deduct the expenses on his Schedule C. Taxpayer also did not demonstrate that alleged contributions were allowable charitable deductions.
Taxpayers, members of a limited liability company (LLC), could not deduct expenses of the LLC as unreimbursed ordinary and necessary partnership (LLC) expenses that they were not required to pay under the LLC agreement.
Taxpayers, investors in real property, could only deduct their investment expenses on Schedule A as miscellaneous itemized deductions and not as business expenses on Schedule C. Taxpayers could not deduct car and truck expenses based on both standard mileage rates and also on actual car expenses.
Taxpayer, a security trader, could deduct his expenses on his Schedule C as business expenses. However, losses incurred by a security trader are not ordinary losses but capital losses limited to a maximum of $3,000 each year.
Equitable recoupment, even if available as a defense in an Arizona tax case, could only be used as a defense and cannot be used to recover erroneously paid tax for which a timely claim for refund was not filed.