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Tax Court Rules of Practice and Procedure.
Respondent determined a deficiency of $3,210 in petitioner’s
1997 Federal income tax. After concessions by petitioner,1 the
sole issue for decision is whether petitioner is entitled to a
dependency exemption deduction for his mother.
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. Petitioner resided in
Perris, California, when the petition was filed.
During 1997 petitioner was a full-time employee of San Diego
1Petitioner concedes the disallowance of the following
deductions claimed on his Schedule C, Profit or Loss From
Business, concerning his internet service business: (1) Car and
truck expenses of $6,655, (2) meals and entertainment expenses of
$780 ($1,560 before taking into account the 50-percent reduction
in the deductibility of such expenses under sec. 274(n)), and (3)
cellular telephone and other expenses of $2,913.
Petitioner concedes the disallowance of his deduction of
$7,376 ($8,000 before taking into account the 2-percent floor on
miscellaneous itemized deductions under sec. 67) for legal
expenses on his Schedule A, Itemized Deductions. As a result of
respondent’s adjustment, petitioner’s itemized deductions were
reduced to amounts that totaled less than the standard deduction
for 1997. Consequently, petitioner’s tax liability was
determined by respondent using the standard deduction, and
petitioner does not dispute use of the standard deduction.
Petitioner concedes that he did not report a taxable
distribution of $1,400 from his individual retirement account
held at the Union Bank of California. He also concedes that he
is liable for the 10-percent additional tax on such distribution
pursuant to sec. 72(t).
Petitioner’s liability for self-employment tax is a
computational matter and is resolved by petitioner’s concessions
set forth above.
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Last modified: May 25, 2011