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Respondent’s calculation of petitioner’s tax liability in
the notice of deficiency is not in the record. However, based
upon the record before us we find that petitioner’s taxable
income was determined in the notice of deficiency as follows:
RRB benefits $19,845
Other income 10,857
Adjusted gross income (AGI) $30,702
Medical expenses 4,801
Less 7.5% AGI (2,303)
Taxes paid 6,976
Total itemized deductions (9,474)
Personal exemption deduction (2,700)
Taxable income 18,528
According to the explanation provided to the Court with regard to
respondent’s concession, respondent: (1) Decreased the taxable
income reflected in the notice of deficiency by $13,290 to
reflect that portion of the RRB benefits not includable in gross
income; and (2) reduced the taxable income by a further $492 to
reflect an increased medical expense deduction allowed in light
of the change to adjusted gross income. Based on these
adjustments to the notice of deficiency, respondent determined
that petitioner’s correct taxable income was $4,745 and that the
correct amount of the deficiency was $712. It appears, however,
that respondent’s calculations are in error in two respects.
First, the amount of the increase in the medical expense
deduction appears to be too small in light of the change to
petitioner’s adjusted gross income. See sec. 213(a). Second,
the calculation does not appear to account for a portion of
petitioner’s income which is long-term capital gain and
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Last modified: May 25, 2011