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sold him the truck subject to the security interests of National
Bank of Detroit and Pro Am.4 A document was filed with the State
of Indiana, reflecting that Mr. Tillman purchased the 1988
Peterbilt truck in 1987 for $71,944. Later that year, the State
of Indiana issued a certificate of title to Mr. Tillman showing
that he owned the 1988 Peterbilt, and that the lienholders were
National Bank of Detroit and Pro Am. Pro Am issued Mr. Tillman a
statement showing that his interest charges would be $10,513 for
1988, if he timely made all of his required payments.
OPINION
Petitioners must prove that respondent's determinations set
forth in her notices of deficiency are incorrect. Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933). Respondent must
prove the increased deficiencies asserted in her amendment to
answer. Rule 142(a); Estate of Bowers v. Commissioner, 94 T.C.
582, 595 (1990).
1. Additional Schedule C Expenses
An individual may deduct all ordinary and necessary expenses
paid or incurred during the taxable year in carrying on a trade
4 Mr. Tillman had borrowed $80,157 from Pro Am to acquire
the 1988 Peterbilt. The loan agreement states:
Borrower warrants and agrees that: * * * Borrower
is the owner of the Collateral free from any liens,
encumbrances or security interests except for the
security interest granted hereby, and will defend the
Collateral against all claims and demands of all
persons at any time claiming the same or any interest
therein; * * *
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