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claim any amount on Schedule A of his Federal income tax return
for 1994 as a medical expense,5 we fail to see how this is
“consistent” with his claim of medical expenses for 1993.
The term “medical care” as used in section 213, allowing the
deduction, includes amounts paid for insurance covering medical
care. Petitioners were entitled to claim as a deduction on
Schedule A the full amount of medical insurance payments made
during the tax year subject to the 7.5-percent limitation. If
petitioners are arguing that a portion of Mr. Reynolds’ payments
for his Government-sponsored medical plan is deductible on
Schedule C, because of his self-employment, we decline to accept
their argument.
Self-employed individuals may deduct as a business expense
the “applicable percentage” of amounts paid for medical insurance.
Sec. 162(l)(1)(A). But no deduction is allowed in excess of the
taxpayer’s earned income from self-employment derived from the
trade or business with respect to which the plan providing the
medical coverage is established. See sec. 162(l)(2)(A); King v.
Commissioner, T.C. Memo. 1996-231. Petitioner’s Government-
sponsored health plan was not established with respect to his
Schedule C business. Furthermore, allowance of the deduction does
5 Petitioners reported adjusted gross income of $104,213 for
1994. In order to obtain the benefit of deducting medical
expenses for the year, total medical expenses would have to
exceed $7,816 (7.5% x $104,213).
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