Paul M. and June S. Sengpiehl - Page 2

                                          2                                           
               After concessions,2 the issues for decision are whether                
          petitioners are entitled to deductions for various amounts                  
          claimed as Schedule C expenses and whether petitioners are                  
          entitled to a dependency exemption deduction with respect to                
          their married son.                                                          
               Some of the facts have been stipulated and are so found.               
          The stipulation of facts and the attached exhibits are                      
          incorporated herein.  Petitioners resided in Oak Park, Illinois,            
          at the time their petition was filed.                                       
               During the taxable year in issue, Paul M. Sengpiehl                    
          (petitioner) was a self-employed attorney.  Petitioner conducted            
          his legal practice out of petitioners' home in Oak Park,                    
          Illinois.  Petitioner did not maintain another office during the            
          year in issue.                                                              
               Petitioners' residence has three stories, including an                 
          unfinished basement.  The basement measures 759 square feet.  In            
          1991, the basement contained the heater and washing machine.  It            
          contained no living area.  Petitioner used 272 square feet of the           
          basement to store materials used in his law practice.                       

          2    Petitioners concede they are not entitled to deductions for            
          car and truck expense in the amount of $930, depreciation expense           
          in the amount of $1,168, and insurance expense in the amount of             
          $1,667.  Respondent concedes that petitioners are entitled to a             
          deduction for office expense in the amount of $6,030, and                   
          petitioners concede that they are not entitled to a deduction for           
          the remaining amount of office expense claimed in the amount of             
          $1,092.  Respondent further concedes that petitioners are                   
          entitled to a Schedule C deduction for other expenses in the                
          amount of $1,889.35.                                                        




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