Larry D. & Marie A. Land - Page 3




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               Respondent determined a deficiency of $5,636 in petitioners'           
          1995 Federal income tax and a section 6662(a) penalty of                    
          $1,127.20.  At trial, petitioners conceded that they are not                
          entitled to deductions of $3,000 for contract labor and $1,156              
          for utilities expenses, which they claimed on their Schedule C.             
          Respondent conceded the section 6662(a) penalty.  This Court must           
          decide:  (1) Whether petitioners are entitled to a claimed                  
          Schedule C deduction of $3,276 for vehicle expense; and (2)                 
          whether petitioners are entitled to an $11,561 deduction for                
          expenses claimed on their Schedule F.  The earned income credit             
          under section 32 will automatically be adjusted for any changes.            
               Some of the facts in this case have been stipulated and are            
          so found.  Petitioners resided in St. Paul, Minnesota, at the               
          time they filed their petition.                                             
               Larry Land (petitioner) filed a Schedule C for a business              
          named New Tech Ideas (New Tech) which was in the business of "NEW           
          PRODUCTS".  Petitioner is the proprietor of New Tech.                       
          Apparently, petitioner has various products he has invented, such           
          as a "wrist saver" and a "dice randomizer".  He claimed he had 17           
          games copyrighted.  Petitioner claimed he had "a lot of                     
          copyrights and a lot of patents out there".  At trial he stated,            
          "Hopefully, one day I'll be able to market them."  As part of his           
          "business", petitioner claimed that he drove around to various              
          stores to window shop, where he would look at the merchandise in            





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