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deductions consisting of the following amounts, due to lack of
substantiation:
Amount claimed Amount allowed Disallowed
Deduction on return per examination amount
Mortgage interest $4,032 $3,709 1$323
Real estate taxes 1,659 1,526 1133
Charitable
contributions 12,500 10,694 1,806
Unreimbursed
employee business
expense 216,050 21,734 14,316
1 Petitioners were allowed this amount as a deduction on their
Schedule C for office in home. Respondent determined that 8
percent of petitioners’ home residence qualifies as a home office.
2 Before application of the 2-percent limitation.
The following combined Schedule C expense deductions of $25,269
were also disallowed:
Amount claimed Amount
Expense on return disallowed
Advertising $1,500 $1,114
Car and truck 2,790 1,519
Insurance 402 402
Office 9,700 9,090
Business use of home-0- (455)
Supplies 9,527 4,470
Utilities 9,894 8,624
Other 505 505
Total $34,318 $25,269
Respondent disallowed the above deductions because petitioners
failed to show that each claimed deduction was an ordinary and
necessary business expense, or because petitioners failed to
substantiate payment of each claimed deduction. Respondent also
determined that petitioners were liable for an accuracy-related
penalty under section 6662.
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Last modified: May 25, 2011