Robert P. Petrocine - Page 6

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                         Type of Expense     Amount Claimed                           
                         Vehicle             $10,096*                                 
                         Business                 3,450**                             
                         Meals and                                                    
                         Entertainment            7,000***                            
                         Miscellaneous          11,250****                            
                              Total             $31,796                               
               * Includes claimed travel mileage (miles x 28 cents),                  
               parking fees, tolls, and other local transportation.                   
               ** Not explained.                                                      
               *** Includes claimed expenses associated with the Club                 
               (after statutory 2-percent floor).                                     
          **** Includes claimed expenses associated with periodicals,                 
               clerical help, and legal advice regarding investment                   
               matters.                                                               

               On audit, with regard to petitioner's 1991 Federal income              
          tax return, respondent refused to allow petitioner to                       
          recharacterize the $37,767 bonus as nontaxable loan proceeds.               
          Based on petitioner's lack of investment income, respondent                 
          disallowed petitioner's claimed $5,433 investment interest                  
          expense deduction for 1991.  Respondent also determined that,               
          based on calculations resulting in a tentative minimum tax                  
          equaling $33,080 and a regular income tax equaling $22,807,                 
          petitioner was subject to the alternative minimum tax (AMT) and             
          owed additional income tax thereunder.                                      
               Also for 1991, respondent determined an addition to tax for            
          petitioner's failure to timely file his Federal income tax                  
          return.                                                                     





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