Victor M. Bello - Page 18




                                       - 18 -                                         
          a taxpayer beyond the year in which the expenditure is incurred             
          is still important in determining whether immediate deduction or            
          capitalization is the appropriate treatment).                               
               We are also not satisfied that petitioner has substantiated            
          this alleged $100,000 "expense".  Although the construction                 
          company, in a later amendment, agreed to build a home worth                 
          $100,000 on petitioner's land, the record does not reflect                  
          whether petitioner had actually conveyed this home to Ms.                   
          Oliveira or had merely allowed her to live in it rent-free.  No             
          deed to her for the home was offered in evidence.                           
               Accordingly, we hold that petitioner is not entitled to                
          deduct under section 162 his claimed legal expense of $100,000              
          for 1995.  See Rule 142(a).                                                 
          Issue 2.  1992 Amazona Loss8                                                
               Petitioner argues that he is entitled to deduct a loss of              
          $28,589 claimed from Amazona for 1992.  On brief, petitioner                
          maintains that the evidence establishes that Mr. Garrett                    
          converted $22,000 which the Ohio Bank had mistakenly credited to            
          Amazona’s bank account.  Although petitioner essentially                    
          acknowledges that Amazona may not have actually had expenses of             
          $48,579 as reported on its amended 1992 return, he now argues               

               8Petitioner was Amazona’s sole shareholder.  See supra p. 9.           
          Petitioner and Amazona thus are not subject to the provisions               
          found in secs. 6241-6245 concerning certain S corporation                   
          shareholders’ treatment of subchapter S items.  See sec.                    
          301.6241-1T(c)(2), Temporary Proced. & Admin. Regs., 52 Fed. Reg.           
          3002 (Jan. 30, 1987).                                                       




Page:  Previous  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  Next

Last modified: May 25, 2011