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petitioners do not indicate that any automobile expenses were
claimed for business use. The record does not reveal whether the
Roys were reimbursed by Roy, Inc. for using their personal
automobiles for business use.
Roy, Inc. reported gross income on Form 1120, U.S. Corporation
Income Tax Return, of $2,468,996 for 1991, $1,882,154 for 1992,
$1,423,110 for 1993, and $1,430,828 for 1994. Roy, Inc. paid and
deducted automobile expenses (insurance, vehicle registration fees,
maintenance and repair expenses, and gasoline) relating to the
Rolls Royce as follows:
Year Automobile Expenses
1991 $5,157.00
1992 4,992.80
1993 4,546.80
1994 4,034.40
Roy, Inc. reported depreciation expense deductions using the double
declining balance method under the Modified Accelerated Cost
Recovery System (MACRS) for the Rolls Royce in the following
amounts:
Year Depreciation Expenses
1991 $4,200
1992 2,550
1993 1,475
1994 1,475
The Roys filed jointly and reported adjusted gross income on
Form 1040, U.S. Individual Income Tax Return, of $1,397,422 for
1991, $906,187 for 1992, $164,377 for 1993, and $503,599 for 1994.
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