- 2 -
Respondent determined a deficiency in petitioners' Federal
income tax for 1994 in the amount of $9,200.
After a concession by respondent,2 the issue remaining for
decision is whether petitioners are entitled to business expense
deductions.
Some of the facts have been stipulated and are so found.
The stipulations of fact and attached exhibits are incorporated
herein by this reference. Petitioners resided in Phoenix,
Arizona, on the date the petition was filed in this case. All
references to petitioner in the singular are to Kenneth Smith.
All of respondent's substantive adjustments in the statutory
notice of deficiency involve amounts claimed with respect to
petitioner's involvement with Tracstar Simulcasting, Inc.
(Tracstar).3 Tracstar provided live satellite transmission of
dog and horse races to various off-track betting (OTB) locations.
It installed all of the equipment at the racetracks and the OTB
locations necessary for sending and receiving the satellite
signals. The racetracks were generally located in Arizona, but
2 In the event that the Court holds that petitioners are
not entitled to the claimed Schedule C deduction for interest
paid with respect to their motor homes, respondent concedes that
petitioners are entitled to an additional sec. 163(h)(3)
qualified residence interest deduction for such interest.
3 Respondent's adjustment to petitioners' liability for
alternative minimum tax is computational and will be resolved by
the Court's holding on the issue in this case.
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011