- 4 -
expenses, $2,732 in taxes,2 $941 in mortgage interest, and $6,340
in charitable contributions. Petitioners claimed Schedule C
business expenses of $21,578, including expenses for advertising,
utilities, and insurance expenses. By notice of deficiency dated
January 2, 1998, respondent determined petitioners had $27,998 in
ordinary income from the sale of the lots, which represents the
sale price ($28,000) less $2 in adjusted basis. Respondent also
disallowed petitioners' claimed Schedule A and Schedule C
deductions for lack of substantiation.
Discussion
Before turning to the substantive issues, we address a
motion made by petitioners at trial to dismiss for lack of
jurisdiction. Petitioners allege this Court lacks jurisdiction
because the period of limitations for assessment has expired.
Petitioners' motion lacks merit. Petitioners' 1992 return was
due April 15, 1993. Petitioners filed their 1992 return on
January 19, 1995, and respondent had at least 3 years after that
to assess tax for that year. See sec. 6501. Respondent issued
the notice of deficiency before the expiration of this 3-year
period, which tolls the applicable assessment period. See sec.
6503. Moreover, the period of limitations is an affirmative
2Of this amount, $2,129 was for real property taxes.
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