Gary L. and Jolene K. Pendleton - Page 5

                                        - 4 -                                         
          of the Schedule A deductions and $19,115 of the Schedule C                  
          deductions.  The deductions were disallowed because petitioners             
          did not establish that the expenses were paid or incurred during            
          the taxable year.  Petitioners conceded that respondent’s                   
          determinations were correct.                                                
               On each return, petitioners claimed $15,480 of rent expense            
          of business property.  Gary explained that the accountant said              
          they could deduct a percentage of the rent on their home as an              
          office.  Rent for the home was $950 per month or $11,400 a year.            
          Petitioners deducted more than 100 percent of the rent and                  
          claimed a deduction of $15,480 for each year in issue.                      
          Petitioners conceded that they did not incur rent expenses of               
          $15,480 with respect to Gary’s sole proprietorship electrician              
          business, as claimed for each of the years at issue.  The $15,480           
          amounts were included in the Schedule C adjustments made by                 
          respondent for each year.  As a result of these rent deductions             
          and others, petitioners showed a Schedule C loss of $16,708 on              
          their 1996 return and a Schedule C loss of $16,800 on their 1997            
               Each party claims relief from joint and several liability              
          pursuant to section 6015(b) and (c).  Each party must satisfy               
          each requirement set forth in section 6015.  Braden v.                      
          Commissioner, T.C. Memo. 2001-69.  The fact that one or the other           
          of petitioners must be the individual who caused an                         

Page:  Previous  1  2  3  4  5  6  Next

Last modified: May 25, 2011