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Schedule C Income and Expenses Claimed by Petitioners
Schedule C Income Claimed by Petitioners
Around 1980, Mr. Hawthorne sold a motel and reported no gain
from that sale. Pursuant to the terms of the real estate con-
tract relating to that sale, Mr. Hawthorne received $1,957.68 in
interest income during 1992, which petitioners reported in
Schedule C of their 1992 return. Respondent determined in the
notice that that interest income is Schedule B interest income
for 1992. Petitioners contend that that determination is wrong.
On the record before us, we find that petitioners have
failed to show that the interest income in question was attribut-
able to the carrying on of a trade or business at the time around
1980 when Mr. Hawthorne sold the motel or at any other time.
Accordingly we sustain respondent's determination in the notice
that that interest income for 1992 is Schedule B interest income.
Schedule C Expenses Claimed by Petitioners
In Schedules C of their 1992, 1993, and 1994 returns,
petitioners claimed expenses totaling $13,337.59, $13,098.76, and
$9,981.94, respectively. Included in the expenses claimed in
Schedules C for 1992 were $716.32 for "Legal and professional
services", $2,775.04 for "Taxes and licenses", and $3,106.06 for
"Depreciation". Included in the expenses claimed in Schedules C
for 1993 and 1994 were $3,621.18 and $2,064.25, respectively, for
"Taxes and licenses" and $3,106.06 for "Depreciation".
In the notice for 1992, respondent disallowed all of the
expenses that petitioners claimed in Schedule C of their return
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