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Gas and electricity $653.63
Water and sewer 213.33
Refuse 193.20
Condominium fee 3,016.26
Property taxes 2,345.42
Mortgage interest 19,865.32
26,287.16
We do not accept petitioners’ assertions concerning depreciation
of the residence. As for the repair expenses (for plumbing and a
broken window), we hold based on the record before us that they
are not sufficiently related to the business use of the property
for any portion to be deductible.
Itemized Deductions
Finally, petitioners argue that they are entitled to various
itemized deductions in lieu of the disallowed business expense
deductions. We agree with respect to certain of these expenses:
Petitioners are entitled to deduct the portions of the mortgage
interest and property taxes which they paid and which are not
allocable to Mr. Brayshaw’s business, as discussed supra. See
secs. 163(a) and (h), 164(a).
Negligence Penalty
Respondent determined that petitioners are liable for a
penalty under section 6662(a) with respect to the underpayment
resulting from the total amount of the deficiency.
Section 6662(a) imposes a 20-percent penalty on the portion
of an underpayment attributable to any one of various factors,
one of which is negligence or disregard of rules or regulations.
Sec. 6662(b)(1). “Negligence” includes any failure to make a
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