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Respondent determined a deficiency in petitioners' Federal
income tax of $1,694 for 1998. Petitioners concede as correct
respondent's adjustments for: (a) Charitable contributions of
$4851 on Schedule A, Itemized Deductions; (b) repairs expense of
$1,175 on Schedule E, Supplemental Income and Loss; and (c) labor
expenses of $450 on Schedule E. Respondent concedes that
petitioners are entitled to deduct: (1) Travel expenses of
$3,319 on Schedule C, Profit or Loss From Business; and (2)
miscellaneous expenses of $400 on Schedule E. The issue
remaining for decision is whether petitioners are entitled to
deduct on Schedule C, $4,067 of telephone expenses.
Some of the facts have been stipulated and are so found.
The stipulation of facts and exhibits received in evidence are
incorporated herein by reference. At the time the petition was
filed, petitioners resided in Flint, Michigan.
Background
During the year 1998, Gwendolyn Arline-Moss (petitioner) was
employed by the State of Michigan as a supervisor in the Office
of Financial Management. She also worked part-time as a real
estate agent for Robert Edwards and Associates (Edwards). There
were 63 agents at the company and only 12 desks from which to
work. Due to the difficulty in obtaining work space at the
1The amount of the adjustment was misstated as $450 during
the oral agreement on the record.
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