Ronald and Judith Francis - Page 9

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          respondent has conceded to be deductible.  See Denman v.                    
          Commissioner, 48 T.C. 439 (1967); Haeder v. Commissioner, T.C.              
          Memo. 2001-7; Shelley v. Commissioner, T.C. Memo. 1994-432;                 
          Martens v. Commissioner, T.C. Memo. 1990-42, affd. 934 F.2d 319             
          (9th Cir. 1991).  Accordingly, we hold that petitioners are not             
          entitled to deduct the $9,502 claimed employee benefit plan                 
          expense under section 162(a).                                               
               Finally, we address whether $5,571 of the claimed employee             
          benefit plan expenses attributable to health insurance premium              
          costs for Mr. Francis is deductible under the special rules of              
          section 162(l).  For 2001, self-employed individuals are allowed            
          to deduct only an amount equal to 60 percent of the amount paid             
          during the year for health insurance.  Sec. 162(l)(1)(A) and (B).           
               Respondent determined that petitioners’ health insurance               
          costs are 60 percent deductible under section 162(l).  We agree.            
          Petitioners paid $5,571 in premiums on two health insurance                 
          policies for Mr. Francis in 2001, and Mr. Francis was self-                 
          employed.  Accordingly, we hold that petitioners are entitled to            
          deduct $3,343 (60 percent) of the $5,571 health insurance                   
          premiums they paid under section 162(l).                                    
               To reflect the foregoing,                                              

                                                  Decision will be entered            
                                             for respondent.                          







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