- 2 - 3-Koam's 1990 U.S. Partnership Return of Income (Form 1065) of $111,962. After concessions by the parties,1 the issues for decision are: (1) Whether pursuant to section 174, 3-Koam may deduct research and development expenses allegedly incurred in 1990.2 We hold it may not, except to the extent allowed by respondent.3 (2) Whether pursuant to section 166, 3-Koam may claim a $30,000 bad debt deduction in 1990. We hold it may not. FINDINGS OF FACT Some of the facts have been stipulated and are so found. The stipulated facts and the accompanying exhibits are incorporated into our findings by this reference. At the time the petition in this case was filed, 3-Koam's principal place of business was in Fremont, California. During the year in issue, 3-Koam used the accrual method of accounting and filed its returns on a calendar year basis. 1 For 1990, petitioner concedes the following amounts: (1) ($3,629) for meals and entertainment, (2) $2,658 for automobile expenses, (3) $194 for insurance, (4) $399 for depreciation, and (5) $340 for interest. These concessions will be reflected in the parties' Rule 155 computation. 2 All section references are to the Internal Revenue Code in effect for the taxable year in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure, unless otherwise indicated. All dollar amounts are rounded to the nearest dollar, unless otherwise indicated. 3 On its 1990 Form 1065, 3-Koam deducted $90,000 for research and development; in her notice of deficiency respondent disallowed $82,000 of such amount.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011