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Petitioners filed joint Federal income tax returns for the
years in issue. Petitioners claimed the following expenses as
deductions on Schedules C, Profit or Loss From Business:4
1990 1991 1993
Depreciation $51,222 $30,703 $31,203
Legal and professional 73,232 42,228 33,733
Travel 61,601 100,601 18,638
Entertainment and meals 12,636 25,693 20,294
On Schedules A, Itemized Deductions, petitioners claimed
deductions as follows:
1990 1991 1993
Home mortgage interest $20,180 $32,741 $7,497
Investment interest 34,265 140,770 30,662
Real estate taxes 9,352 13,147 9,920
Charitable contributions 8,548 4,583 3,521
Other expenses 13,783 210,392 1,219
Medical and dental --- --- 5,473
Total 86,128 3100,865 58,292
1 Petitioners reported investment interest of
$41,232, but deducted $40,770 due to the limitation of
sec. 163(d)(1).
2 On their amended return, petitioners reported
other expenses of $10,658. These amounts will be
affected by computational adjustments.
3 Although $100,865 is the total Schedule A
amount reflected on petitioners’ 1991 return, the
correct total amount is $101,633.
Petitioners also reported investment income of $52,345 in 1990,
$40,770 in 1991, and $62,239 in 1993. Petitioners claimed an
investment tax credit of $3,151 in 1993.
4 Petitioners claimed other expenses for each year that
are not at issue.
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