- 6 - petitioners' tax return, Harris Enterprises' income and expenses for 1992 were as follows: Income: $18,448 Expenses: Advertising $5,275 Depreciation 28,280 Insurance 4,475 Mortgage interest 26,874 Office expense 420 Repairs and maintenance 3,408 Taxes and licenses 8,310 Utilities 5,135 Water well replacement 6,500 Gravel parking lot 2,900 (91,577) Net loss (73,129) The $18,448 of gross income included approximately $500 from the occasional rental of the buildings for auctions or flea markets; the rest of the gross income was attributable to the rent of the storage units. As to the claimed depreciation, $912 was claimed on a computer, and the rest was claimed on the buildings. Petitioners' tax return reports that the computer was purchased in 1986 at a cost of $6,525, and that the buildings were purchased in 1986 at a total cost of $520,000. Respondent determined that petitioners were not entitled to deduct any of the $42,955 amount claimed for the business expenses reported as advertising, gravel parking lot, water well replacement, and depreciation. As to the first three expenses, respondent determined that petitioners had not established that those expenses were paid or incurred during the taxable year, orPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
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