Jack Chien Ching Huang - Page 3




                                        - 2 -                                         
               Respondent determined a deficiency in petitioner’s Federal             
          income tax and an accuracy-related penalty for 1997, as follows:            

                           Penalty                                                    
                           Deficiency      Sec. 6662(a)                               
                           $9,017         $1,803.40                                   
                                                                                     
               After concessions by the parties,2 the issues remaining for            
          decision are as follows:                                                    
               (1) Whether petitioner is entitled to a deduction for an               
          office in the home.  We hold that he is to the extent provided              
          herein.                                                                     
               (2) Whether petitioner is entitled to a deduction for                  
          repayment of principal on a bank loan.  We hold that he is not.             
          Background                                                                  
               Some of the facts have been stipulated, and they are so                
          found.  Petitioner resided in Pasadena, California, at the time             
          that his petition was filed with the Court.                                 


          2 Respondent concedes: (1) Petitioner did not receive                       
          unreported gross receipts; (2) petitioner is entitled to a                  
          Schedule C, Profit or Loss From Business, deduction for interest            
          expense in the amount of $1,279; (3) petitioner is entitled to              
          additional Schedule C deductions in the amount of $3,400; (4)               
          petitioner is entitled to an additional Schedule C deduction for            
          rent expense in the amount of $787; and (5) petitioner is not               
          liable for the accuracy-related penalty under sec. 6662(a).                 
               Petitioner concedes that he is not entitled to a Schedule C            
          deduction for salaries and wages.                                           
              The imposition of self-employment tax, the deduction under             
          sec. 164(f) for one-half of the self-employment tax, and the                
          earned income credit are mechanical matters the resolution of               
          which depends on our disposition of the disputed issues and the             
          parties’ concessions.                                                       





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