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Petitioners have conceded that $45 should have been reported
as interest income in 1991 earned on a bank account. They claim
that they are entitled to a deduction of $48, the amount of bank
fees incurred in maintaining the account either as an ordinary
and necessary trade or business expense, under section 162, or as
an ordinary and necessary expense incurred for the production of
income, deductible under section 212.
The general rule is that bank fees are deductible only if
the bank account on which the fees were incurred was used for
business purposes. Callander v. Commissioner, 75 T.C. 334
(1980). The only evidence that the account was used for business
purposes is petitioners' testimony at trial. Petitioner failed
to offer into evidence any records that would show that this
account was not used for personal purposes. Petitioners are
accordingly not entitled to any deduction for the bank charges.
Unreported Income
Respondent determined that petitioners received income in
the form of discounted insurance premiums from Doug Priester in
1991. Petitioner testified at trial that he performed no
services for Doug Priester and that he did not receive a Form
1099--or cash--from Priester. Petitioner did purchase insurance
from Priester, but offered nothing into evidence on this issue
that would rebut the determination that he received a discount
that constituted income.
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