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expenses of $22,590, subject to the limitations set forth in
section 67(a).
Agustin Perez (Mr. Perez) and Isabel Sanchez (Ms. Sanchez)
filed their 1996 Federal income tax return and reported wage
income of $29,365. The Perez-Sanchez return includes a Schedule
E which reports rents received (“lease value”) of $42,238, offset
by an equivalent amount of expenses. In the notice of
deficiency, respondent determined that they had gross receipts
for Schedule C of $71,603, allowed Schedule C business expenses
of $42,895, determined further that Mr. Perez was liable for
self-employment tax of $4,056, and allowed a self-employment tax
deduction of $2,028. Again, respondent no longer contests the
classification of employee, concedes the self-employment tax
issues, and agrees that a deduction of $42,895 is allowable on
Schedule A as a miscellaneous itemized deduction, subject to the
section 67(a) limitation.
Each of petitioner husbands herein entered into an agreement
with a trucking company regarding his working relationship. Mr.
Escobar and Shipper’s Transport entered into an agreement
entitled “Owner-Operator Equipment Agreement” on February 10,
1995. In 1995, Mr. Batres entered into a contract with Calko
Transport Co., Inc. (Calko). Mr. Perez, on October 23, 1995,
entered into an agreement entitled “Lease and Subhaul Agreement
with Independent Contractor” with Interstate Consolidation, Inc.,
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Last modified: May 25, 2011