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accuracy-related penalty in the amount of $302 pursuant to
section 6662(a). A computational adjustment was made.
The Court must decide whether section 280A and the overall
limitation set forth in section 280A(c)(5) are applicable to
business expense deductions claimed by petitioner in connection
with her art/fine art business located in the building where
petitioner resided. Respondent has conceded that petitioner is
not liable for the penalty under section 6662(a).
Some of the facts have been stipulated and are so found.
For clarity and convenience, our findings of fact and opinion
have been combined. Petitioner resided in Berkeley, California,
when her petition was filed.
On her 1992 Federal income tax return, petitioner reported
wages of $25,308 that she earned as a part-time teacher at St.
Paul's and at Ecole Bilingue.
On her 1992 return, petitioner also reported a net loss of
$6,925 from her art/fine art business. She reported $2,400 in
gross receipts from that business on her Schedule C. She
subtracted $1,159 as the cost of goods sold and reported gross
income of $1,241. She claimed as deductions the following
expenses on her Schedule C:
Expense Amount
Car & Truck $ 672
Legal 185
Office 80
Rent 6,740
Repairs & Maintenance 100
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Last modified: May 25, 2011