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Mrs. Tesar is a licensed physical therapist. In her
practice, during the years in issue, she generally performed
services on her patients in their homes or other locations
outside of petitioners' home. Mrs. Tesar used an extra bedroom
in petitioners' home as her office. She maintained her records
in her home office, and she completed work at home including
transcribing her notes, contacting doctors and patients, and
updating her records on her patients.
Generally, Mrs. Tesar drove from petitioners' home to the
location where she was to deliver services and then returned
home. She maintained records of her travel on large calendar
sheets. She listed the name and address of the patient she
visited in the box provided on the sheet for that day.
Petitioner copied information from Mrs. Tesar's calendar pages on
an annual basis for the preparation of petitioners' tax returns.
Petitioner's summary sheets list the name of each patient or
client along with the round-trip mileage and date of travel from
petitioners' home to the location where services were rendered.
On their Federal income tax return for 1991, petitioners
claimed a Schedule C deduction for car and truck expenses
incurred by Mrs. Tesar in the amount of $4,574. This amount
represents mileage of 6,960 times the standard mileage rate of
.275 plus depreciation expense of $2,660. Petitioners also
claimed a deduction in the amount of $2,866 for expenses incurred
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