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Respondent determined a deficiency in petitioners' Federal
income tax for 1992 in the amount of $1,740 and an accuracy-
related penalty pursuant to section 6662(a) in the amount of
$348.
After concessions by petitioners,2 the issues for decision
are: (1) Whether petitioners are entitled to a Schedule C
utility expense deduction; (2) whether petitioners are entitled
to a loss deduction with respect to certain stock; (3) whether
petitioners are entitled to a deduction for tax preparation fees;
and (4) whether petitioners are liable for the section 6662(a)
accuracy-related penalty.
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 the State of
Oregon on the date the petition was filed in this case.
The first issue for decision is whether petitioners are
entitled to a Schedule C utility expense deduction. Section
162(a) allows a deduction for the ordinary and necessary expenses
paid or incurred during the taxable year in carrying on a trade
or business. Respondent does not dispute that petitioner husband
2 In their petition, petitioners disputed the deficiency
and accuracy-related penalty by stating that they "can justify to
where we might even have a little coming back to us." At trial,
petitioners failed to address or introduce any evidence with
respect to many of the adjustments in the statutory notice of
deficiency. Petitioners are deemed to have conceded the
adjustments which they failed to properly address in their
petition or at trial. Rule 34(b)(4). We therefore address only
those adjustments and other matters raised at trial.
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Last modified: May 25, 2011