- 7 -
Petitioner used this loan to pay down the then outstanding
balance on his line of credit with Providian Bank.
In September 1997, petitioner borrowed another $5,000 from
his mother and $3,000 from his aunt. Petitioner used $7,540 of
these loans to pay down the then outstanding balance on his line
of credit with Providian Bank.
G. Petitioner’s 1997 Income Tax Return
Petitioner filed Form 1040, U.S. Individual Income Tax
Return, for 1997. Petitioner attached to his return a Schedule
C, Profit or Loss From Business, and claimed deductions for
various expenses in the total amount of $77,042. Included in
this amount was a deduction for rent in the amount of $14,815 and
a deduction for “other expenses” in the amount of $21,091.
Included in the deduction for rent was $8,028, representing
expenses for the business use of petitioner’s home. Included in
the deduction for “other expenses” was $12,540, representing the
repayment of principal on the loan from his line of credit with
Providian Bank.
H. Notice of Deficiency
Respondent determined a deficiency in petitioner’s income
tax for 1997. In the notice of deficiency, respondent
determined, inter alia, that petitioner is not entitled to any
deduction for an office in the home or for repayment of principal
on the loan from his line of credit with Providian Bank.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011