Timothy E. Butler - Page 6

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          and also claimed a dependency exemption for James, whom                     
          petitioner identified as his infant son.   Petitioner attached              
          Schedule A to his return.  Included among the deductions claimed            
          on Schedule A were the following:                                           
               Real estate taxes                             $1,963                   
               Home mortgage interest                         2,920                   
               Charitable contributions:                                              
                    contributions by cash or check   $200                             
                    other than by cash or check       400       600                   
               Petitioner also attached Schedule E (Supplemental Income and           
          Loss) to his 1994 return and reported rents received (in the                
          amount of $3,375) and expenses with respect to the Duplex.                  
          Petitioner underreported rents received by $2,025.  Among the               
          deductions claimed on Schedule E were the following:                        
                    Cleaning & maintenance     $1,090                                 
                    Mortgage interest           1,460                                 
                    Repairs                     2,300                                 
                    Taxes                         981                                 
                    Utilities                     800                                 
               Petitioner duplicated deductions for (home) mortgage                   
          interest and (real estate) taxes claimed on his Schedule A and              
          Schedule E for 1994.  In this regard, during 1994 petitioner paid           
          mortgage interest in the total amount of $2,920 and real estate             
          taxes in the total amount of $1,963.  Petitioner deducted each of           
          those amounts in its entirety as an itemized deduction on                   
          Schedule A and one-half of each of those amounts as a rental                
          expense on Schedule E.                                                      







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