- 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 NextLast modified: May 25, 2011