- 16 - amount of $11,104.67. The property for which the escrow deposit was made was not identified in a way that was understandable to the examining Internal Revenue agent ("PROPERTY ADDRESS: AP #007-060-04"). Appeals later requested on November 17, 1999, identifying information for the purchase and sale of the Vallecito property. The identifying information must therefore have been received sometime after that date, and after the October 26, 1999, filing of respondent's answer in the case. Capitalized Costs From 1994 During the examination of petitioners' 1994 Federal income tax return, respondent disallowed Schedule C deductions for automobile expenses, property taxes, and insurance. Petitioners allege that there was an "informal agreement" to allow them to capitalize a portion of the costs and to allow "deduction" of them in 1996. The notice of deficiency for 1996 does not reflect such an informal agreement. There is but scant evidence in the record of an informal agreement as alleged by petitioners. It is not apparent what the terms of such an agreement may have been. And it was, by petitioners' own description, an "informal" agreement. After reviewing documents submitted by petitioners on November 11, 1999, Appeals agreed to allow petitioners to capitalize as part of the cost of the Vallecito property a portion of the 1994 expenditures for automobile expenses and property taxes.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011