Diesel Country Truck Stop, Inc. - Page 13




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          3.  Claimed Business Expenses                                               
               A. Automobile Expenses                                                 
               Petitioner had an American Express Corporate Card account,             
          in the name of “ATN S Khatchatourian” (sic).  Credit cards on               
          this account were issued to Steve, Andy, Roubik Khachatourian               
          (another brother of Steve’s), Peter Soghomonia, and Carl                    
          Ledbetter.  American Express monthly summary statements issued              
          during 9 of the months of petitioner’s fiscal 1990 show charges             
          totaling about $15,220.                                                     
               Petitioner owned a Mercedes 560SL automobile, hereinafter              
          referred to as the Mercedes.  Steve used the Mercedes as his                
          personal car.  Petitioner paid the expenses of the Mercedes.                
               On its fiscal 1990 tax return, petitioner claimed a $29,877            
          “car/truck” expenses deduction.  In the notice of deficiency,               
          respondent disallowed this entire amount.                                   
               B. Rent Expenses                                                       
               In 1987, petitioner, Steve, and Andy entered into a lease              
          agreement under which Steve and Andy leased to petitioner the               
          land on which petitioner’s truck stop was located.  Under this 5-           
          year lease, petitioner was to pay $5,000 per month rent to Steve            
          and Andy.                                                                   
               On his 1990 income tax return, Steve reported receiving                
          $10,000 rent income from petitioner.                                        








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