- 5 - officers. The after-tax amounts of petitioner's bonus payments were credited against the debit balance in the personal expense account. In other words, the bonus payments were used to repay the amount owed by petitioner to Tracstar for personal expenses charged to the Corporate card and the Gold card. The total amount credited to the personal expense account in this manner during 1994 was $21,798.66. Tracstar's balance sheet dated December 31, 1994, shows a debit balance in the personal expense account in the amount of $20,289.68. Petitioner ceased working for Tracstar in January 1995. He disputes his liability for some of the charges which Ms. Parsons characterized as personal expenses and debited to the personal expense account. Litigation over the amounts payable by petitioner and Tracstar was ongoing at the time of the trial in this case. Petitioners filed a joint Federal income tax return for 1994. Their return was prepared by Tracstar's accountant, Michael Klecka. Petitioners reported the total of petitioner's regular ($65,000 = 26 payments times $2,500) and bonus compensation ($31,680 = 11 payments times $2,880) from Tracstar as wages and other compensation on petitioners' 1994 return. Petitioners claimed a Schedule C business loss deduction in the amount of $19,553. In the statutory notice of deficiency, respondent disallowed the claimed deduction. The Schedule C andPage: Previous 1 2 3 4 5 6 7 8 9 Next
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