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income tax refund of $494 is includable in their gross income in
1995.2
Other concessions were made or modified outside the
stipulation. The first concerns the interest expense deducted by
petitioners with respect to their writing/lecturing business.
Petitioners deducted interest expenses for this business in the
amounts of $5,342, $6,845, and $11,303, for 1993, 1994, and 1995.
Of these amounts, respondent disallowed (i.e., made adjustments
of) $1,417, $4,256, and $10,206. In his trial memorandum,
respondent concedes that the notice of deficiency should have
allowed as deductions expenses of $3,878, $2,774, and $1,061 for
the years 1993, 1994, and 1995, respectively. Respondent made
conflicting statements at trial, stating that the adjustments in
the notice of deficiency should be reduced by the amounts of
(rather than result in allowances of) $3,878, $2,774, and $1,061
for the years in issue, respectively. Because it is clear from
the record that respondent’s counsel misspoke at trial, we accept
the trial memorandum’s version as respondent’s concession.
However, we will disregard the conceded amounts in 1993 and 1995
because these amounts actually decrease the amount of allowable
2The stipulation also contained a purported concession in
respondent’s favor concerning petitioners’ travel/writing/
consulting business. The concession names “other interest”, an
expense not at issue in this case with respect to that business.
Although we assume the parties meant to refer to travel expenses,
which are at issue, we do not need to resolve the ambiguity in
this concession due to our holding on the issue in this case.
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