Raymond Verni Schroeder - Page 10

          the base amount, $32,000, by $10,938.  One-half of this excess is           
          equal to $5,469, which amount is less than one-half of the Social           
          Security benefits received, $10,687.  Respondent adjusted                   
          petitioner's income by $5,461 pursuant to section 86.  Respondent           
          is sustained on this issue.                                                 
          Deduction for Taxes                                                         
               Deductions are a matter of legislative grace, and                      
          petitioners must prove entitlement to any deductions claimed.               
          New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).                
          Section 262 prohibits the deduction of personal, living, or                 
          family expenses.  Prior to 1986, section 164(a)(4) allowed a                
          deduction for State and local sales taxes paid during the taxable           
          year.  Section 164(a)(4) was repealed by section 134(a)(1) of the           
          Tax Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2116.                     
               Petitioner testified that the taxes, for which he claimed a            
          deduction in the amount of $998, were State sales taxes and taxes           
          imposed on utilities purchases.  These taxes are not deductible             
          under section 164.  Respondent is sustained on this issue.                  
          Other Miscellaneous Deductions                                              
               Petitioner claimed a deduction in the amount of $1,010 paid            
          in connection with his sister-in-law's burial and service held at           
          sea.  Petitioner seems to argue that because this was required in           
          accordance with his sister-in-law's beliefs, the amount                     
          represents a religious expenditure or charitable contribution.              

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