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On her 1993 income tax return, petitioner claimed the
standard deduction and reported gross receipts and expenses of
her trucking business on Schedule C in the following amounts:
Gross receipts $44,275
Expenses
Tolls 2,900
Depreciation 3,000
Insurance 1,300
Repairs & maintenance 1,600
Supplies 1,335
Taxes (registration) 919
Wages 3,000
Other expenses (fuel,
tires, parking, road tax) 14,260
Total expenses 28,314
Net business income 15,961
At an unspecified time in 1993, petitioner sold one of her
trucks for $12,000. In July 1991, petitioner had purchased
the truck for $14,000 and had paid $500 for a truck warranty.
Petitioner had claimed depreciation deductions on the truck of
$1,450 and $2,900 for the 1991 and 1992 taxable years,
respectively. Petitioner did not report the sale of the truck on
her 1993 tax return.
B. Rental Activity
During 1993, petitioner purchased a two-family house in
North Bergen, New Jersey, and on April 1, 1993, she moved into
the house. Petitioner paid the purchase price of $170,000 for
the house in the following manner:
Initial deposit on purchase $22,500
Payment at closing of title 22,500
Mortgage loan proceeds 125,000
Purchase price 170,000
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Last modified: May 25, 2011