- 5 -
Pharmacy in the amount of $1,255.13. Petitioner testified that
these expenses were for prescriptions. He admitted that it was
possible that some of these amounts were for items other than
prescriptions.
Petitioner presented canceled checks made out to Golden Rule
Insurance in the amount of $5,473.37 and Liberty Fund Inc. in the
amount of $40.50 The checks made out to Golden Rule Insurance
were paid quarterly. Petitioner testified that they were for
health insurance. Petitioner was not sure whether Liberty Fund
Inc. was for health insurance. Petitioner also presented checks
in the amount of $343 made out to doctors and medical
laboratories.
It is clear that petitioners incurred medical expenses.
Under the Cohan doctrine, we estimate the allowable amounts of
expenses as follows. We allow $880 for prescription expenses,
all of the insurance payments to Golden Rule Insurance of
$5,473.37, and all of the doctor and medical laboratory expenses
of $343, for a total of $6,696.37, which is more than the $6,393
petitioners claimed on their return. This deduction is subject
to a floor of 7.5 percent of adjusted gross income.
Respondent disallowed $3,165 of interest expense. A
deduction for interest paid on indebtedness during the year is
generally allowed under section 163(a). However, section
163(h)(1) provides that no deduction is allowed for personal
interest. "Personal interest" does not include any "qualified
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011