Tae M. Kim and Young J. Kim - Page 10




                                       - 10 -                                         
          Legal Services for 1993                                                     
               The legal services claimed by petitioners for 1993 were part           
          of the settlement costs of the purchase of their condominium                
          unit.  These legal services constitute a capital expenditure                
          which is added to petitioners' cost basis in the condominium                
          unit.  To the extent the condominium unit is used for business              
          purposes, a portion of these legal services is deductible as part           
          of the depreciation deductions for the condominium unit.  We hold           
          that petitioners are not entitled to any deduction for 1993 for             
          legal services.                                                             
          Office Expense for 1993 and 1994                                            
               We find petitioners' records of their office expenses for              
          1993 reliable.  For 1994, respondent disallowed only the portion            
          of the claimed office expense deduction which was claimed for a             
          computer monitor.  This item was also claimed by petitioners on             
          one of their depreciation worksheets.  Based on the record, we              
          sustain petitioners' claimed deduction for 1993 and respondent's            
          disallowance for 1994.  We hold that petitioners are entitled to            
          office expense deductions for 1993 and 1994 in the amounts of               
          $1,487 and $845, respectively.                                              
          Rent or Lease of Business Property for 1993 and 1994                        
               The parties have agreed that the amounts allowed and                   
          conceded by respondent for 1993 and 1994 with respect to the                
          claimed rental expenses represent petitioners' condominium                  






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