- 11 - concedes that it is not allowable as a deduction in 1990. Petitioner admitted that this interest was paid by him in 1989 and offered by way of explanation that he did not have his bank statement available in time to claim the amount on his 1989 return, and so he claimed it on his 1990 return. We find this constitutes "disregard of rules or regulations" within the meaning of section 6662(b)(1). With respect to "Other" interest of $10,210, the parties have stipulated that petitioner is not entitled to any deduction on Schedule C for "Other" interest but instead is entitled to a mortgage interest deduction of $7,730 on Schedule A of his 1990 return. Petitioner has offered no explanation for the $2,480 in claimed interest to which he now concedes he is not entitled. In the absence of any substantiation for this amount, we find that the underpayment arising from its disallowance is attributable to negligence. Sec. 1.6662-3(b)(1), Income Tax Regs. 1990 Legal Expenses Petitioner claimed $10,556 in legal expenses in Schedule C of his 1990 return to which the parties now stipulate he was not entitled. The amount represents legal fees petitioner paid in connection with the purchase of a house in Florida as part of his efforts to commence a homebuilding business. Petitioner now concedes that the amounts should have been capitalized and added to the basis of the house. Petitioner did not seek any professional advice with respect to taking the deduction. WePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
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