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Federal income tax in the amount of $3,349. This Court must
decide: (1) Whether petitioner is entitled to deduct claimed
Schedule C expenses, and (2) whether petitioner is entitled to
Schedule E expenses in excess of the amounts allowed by
respondent. The additional adjustment made in the statutory
notice of deficiency with respect to petitioner’s itemized
deductions is computational in nature and will be resolved by our
holding on the issues herein.
Some of the facts in this case have been stipulated and are
so found. Petitioner resided in Las Vegas, Nevada, at the time
he filed his petition.
During 1997, petitioner resided at 2021 Hallwood Drive
(Hallwood residence) in Las Vegas, Nevada. Petitioner purchased
the Hallwood residence in 1995 for $122,200.
On his 1997 Form 1040, U.S. Individual Income Tax Return
(1997 return), petitioner listed his occupation as “Investor”.
The Hallwood residence was listed as petitioner’s business
address on his Schedule C, Profit or Loss From Business (Schedule
C). On his Schedule C, petitioner reported no gross receipts or
sales with respect to his purported “investor” business.
Petitioner claimed total deductions on his Schedule C as follows:
(1) Car and truck expense of $4,123; (2) depreciation expense of
$1,396; (3) supplies expense of $835; (4) utilities expense of
$445; and (5) office expense of $1,480. Petitioner reported a
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Last modified: May 25, 2011